General equilibrium impact of an energy-saving policy in the public sector

We analyse a disregarded environmental policy instrument: a switch in government expenditure away from energy (or other natural resources) and toward a composite good which includes energy-saving expenditure. We first develop two variants of an analytical general equilibrium model. A composite good is produced with constant returns to scale, and energy is imported or produced domestically with diminishing returns, yielding a differential rent to its owners. The government purchases energy and composite goods from private firms. Such a policy unambiguously increases employment. It also raises private consumption and welfare under two conditions: (i) it is not too costly and (ii) the initial share of the resource is smaller in public spending than in private consumption, or the difference is small enough. We then run numerically a model featuring both importation and domestic production of energy (oil, gas and electricity), for the OECD as a whole. Simulations show that employment, welfare and private consumption rise. We provide magnitudes for different parameter values. Earlier versions of this paper have benefited from conference participants at the European Council for an Energy-Efficient Economy, International Society for Ecological Economics World Congress, CIRED seminar and EUREQua environmental economics seminar. We especially thank Michèle Sadoun and two anonymous referees. The usual disclaimer applies.     

Optimal public education policy in a two sector model

Proposing a simple two sector model with occupational choice, this paper analyzes the relationship between optimal public education policy and industrial structure. Workers are employed based on their skills and education policy influences the distribution of human capital. Thus, the industrial structure determines whether an elite education policy or an egalitarian education policy is desirable. In particular, this paper indicates how the productivities of each sector and market sizes affect optimal public education policy.     

Redistribution and the marginal cost of public funds

Discussions of the marginal cost of public funds with distortionary taxation are often cast in the framework of a one-consumer economy, while the main justification of distortionary taxes is that they are needed for redistribution. This paper analyzes the issue in a model with heterogeneous consumers and a linear income tax, focusing on the tradeoff between labour market distortions and the redistribution from high-wage to low-wage workers. In an optimal tax system the MCF will be the same for all sources of funds and under certain assumptions less than one. Without optimality the MCF will in general differ between different sources of finance.     

Redistribution policy: A European model

Following the rationale for regional redistribution programs described in the official documents of the European Union, this paper studies a simple multicountry model built around two regions: a core and a periphery. Technological spillovers link firms' productivity within each of the two regions, and each country's territory falls partly in the core and partly in the periphery, but the exact shares vary across countries. In line with the official view of the European Union, we find that the efficient regional allocation requires both national and international transfers. If migration is fully free across all borders, the optimal redistribution policy results from countries' uncoordinated policies. However, if countries have the option of setting even imperfect border barriers, then efficiency is likely to require coordination on both barriers and international transfers (both of which will be set at positive levels). The need for coordination increases as the Union increases in size.     

On the size of the public sector

The main goal of this paper is to detect the mechanisms that should rationally stimulate the decision making-policies of the European Central Bank (ECB). This is carried out under the framework of theoretical principles of interest rate rules. Firstly, we deduce a set of logically advisable guidelines for the strategy actually developed by this central bank. Then we contrast a wide set of hypotheses with reference to those variables the ECB takes into account on deciding its monetary policy, with a flexible treatment regarding the number of months of advance or delay in the explanatory variables. The results lead us to the conclusion that the ECB, besides adopting a smooth strategy, especially bears in mind the expected core inflation rate, with a reaction coefficient adjusted to that initially proposed by Taylor. The economic growth rate, though it has a significant positive coefficient, matters relatively little and is backward looking. Finally, we evaluate up to what point the behaviour of the ECB is assimilative to an inflation targeting framework, solving this question affirmatively.     

Deriving public sector preferences

Many analyses of the public sector use preferences which are defined on public sector allocations. We relate these preferences to the primitive preferences defined on the consumption space. Many properties of consumption preferences are inherited by derived public sector preferences but not all. We also question whether public sector preferences can be independent of prices with a negative conclusion. Also different definitions of derived public sector preferences are related.     

Political preferences and public sector outsourcing

Given the intensive and ideologically charged debate over the use of private contractors for publicly funded services, it is somewhat surprising that many social scientists have preferred to explain government outsourcing by the pursuit of economic efficiency. Starting out from different theories, we investigate political explanations of government outsourcing using a Swedish data set in which outsourcing varies between municipalities and over time, as well as between services. Our identification strategy focuses on two services with similar contracting problems and local market conditions: preschools and primary schools. We study a period in which Swedish municipalities had full discretion in the provision of preschools, while their influence on the private provision of primary education was limited by a national voucher system. The comparison of preschools with primary schools in a difference-in-differences model suggests that the political color of the ruling majority influences outsourcing, which is consistent with the Citizen Candidate model of representative democracy.     

Auditing and competitive bidding in the public sector

This paper investigates the impact of a ministry's budget size on the choice between auditing a (Niskanen)bureau and employing competitive bidding in the provision of a publicly funded good. The ministry's marginal expected payoff increases fastest with budget size for auctioning as opposed to auditing. However, the ministry is shown to switch from a purely public provision to a competitive provision as the budget size increases even if expected fixed costs favor the audit. The study contributes to the literature by extending the Niskanen framework and by endogenizing the institutional arrangements for the provision of public sector goods.     

Tax structure and public sector growth

It has been hypothesized that a jurisdiction's tax structure exerts an indipendent effect upon the growth of its public sector. We test this hypothesis by examining the relationship between the growth of state general expenditure and the elasticity of tax revenues with respect to income. The work takes advantage of a very careful set of income elasticities for the personal income and sales tax systems for each state, for every year from 1978 to 1983. The main conclusion is that the data do not support the notion that the form of the tax structure exerts an independent effect on public sector growth.     

On the capital intensity of the public sector

Summary This paper investigates the endowment of the public sector with capital goods and the intensity of its use, a question rather neglected until now. Following a discussion of some methodological problems using the example of the federal government of Austria, an attempt is made to answer this question.Despite the remaining data and valuation problems, there is enough evidence to conclude that the government sector is remarkably capital intensive, not only as a producer of the physical infrastructure, but also as a service enterprise fulfilling government functions, in comparison with Austrian business firms and stock corporations. The high values of capital intensity, however, are not due to a large stock of machinery, but are the result of the high proportion of real property in the physical capital stock of the public sector.Furthermore, an attempt is made to critically evaluate the empirical results and to draw some theoretical conclusions.

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Zusammenfassung Die Arbeit stellt die bisher vernachlässigte Frage nach der Sachkapitalausstattung und der Intensität der Kapitalnutzung in der öffentlichen Verwaltung. Es wird versucht, diese Frage nach einer Erörterung methodischer Probleme für Österreich am Beispiel der Hoheitsverwaltung des Bundes zu beantworten.Trotz der nur teilweise gelösten Daten- und Bewertungsprobleme zeigen die empirischen Befunde, daß die Hoheitsverwaltung, am Maßstab der österreichischen Industrieunternehmen und Aktiengesellschaften gemessen, nicht nur als Produzent der materiellen Infrastruktur, sondern auch als Dienstleistungsbetrieb, der öffentliche Aufgaben erfüllt, bemerkenswert kapitalintensiv arbeitet. Die hohen Werte der Kapitalintensität sind allerdings nicht auf die maschinelle Ausstattung zurückzuführen, sondern resultieren aus dem großen Anteil der Liegenschaften am Sachkapital der Verwaltung.Es wird weiters versucht, die Aussagekraft und Grenzen der empirischen Ergebnisse kritisch abzuschätzen und erste theoretische Schlußfolgerungen zu ziehen.

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I am thankful to G. Fink and the anonymous referees of the journal for valuable comments on an earlier version.     

Manipulation and auditing of public sector contracts

We model purchaser–provider contracts when providers can inflate reimbursable activity through manipulation. Providers are audited and fined upon detected fraud. We characterise the optimal price and audit policy both in the presence and absence of commitment to an audit intensity. Under ‘non-commitment’ the audit intensity increases in reported activity, allowing the provider to soften it by reducing activity together with the underlying service quality and manipulation. The purchaser then faces a trade-off between offsetting this tendency by raising price and committing to a low audit intensity by reducing price. We identify circumstances under which the two forces balance out.     

Agility evaluation in public sector

Agility metrics are difficult to define in general, mainly due to the multidimensionality and vagueness of the concept of agility itself. In this paper, a knowledge-based framework is utilized for the measurement and assessment of public sector＇s agility by A. T. Kearney model. In this research, the authors used Z2 test in SPSS software. So, the authors discovered that the General Office of Standards ＆ Industrial Research of Sistan ＆ Baluchestan Province in Iran is agile. Finally, the authors determine the weakness points of organization by Friedman test.     

公共管理的价值根源

公共管理具有多种价值根源。美国公共管理学会（APSA）认为，有五种主要的价值根源影响着公共政策的制定，它人包括：个人价值、职业价值、组织价值、合法价值和公共利益价值。处理好这些价值之间的矛盾，需要公共管理者进行认真判断和思考。     

Management and employee buy-outs from the Austrian public sector

This paper seeks to extend our understanding of the nature and effects of privatization to the case of Austria, a relatively small economy in which management buy-outs have been a numerically important but neglected part of the privatization programme. The study reviews the development of privatization in Austria and sets management and employee buy-outs within this context. The paper identifies 35 privatization buy-outs, analysing their form and industrial distribution. Evidence from detailed interviews with the 22 largest is used to analyse the effects of buy-out on corporate change, the role of insiders and performance. Comparisons are made with the UK, where management and employee buy-outs have also been an important part of the privatization programme.     

Modelling policy options in the Indonesian agricultural sector

This paper persents a simple model framework for quantitative multi-market agricultural sector policy analysis. Although the example refers to the Indonesian case, the model structure is also applicable for other country studies. Since either prices or trade requirements can be set exogenously, the model is particularly useful for policy analysis in countries using trade controls to pursue food self-sufficiency targets. Data requirements are limited to supply-and-demand elasticities, some technical coefficients on the relationship between food and non-food prices, non-price induced trends in single commodity markets and in the non-food sector as an aggregate and a base-year data set. The model was developed to be relatively transparent to policy-makers and to allow for an easy revision of the magnitude of policy parameters or trend estimates if so needed. For the case study, econometric estimates, which are consistent with the requirements of neoclassical theory, have been used to parameterize the model. Model simulations have been run for the price run-up period of 1986 to 1988 and also for the Fifth Plan period 1988 to 1993. The results show that the model is a useful instrument to investigate in multi-market and multi-sector interrelationships of a country focussing on agriculture. For the Indonesian setting moel results suggest that during the Fifth Plan period rice self-sufficiency targets are easily met without the need of a particular investment or subsidy scheme. However, rice self-sufficiency and on-target performance of other important agricultural commodity markets in Indonesia will not come along automatically with the creation of jobs up to an amount needed to fight increasing rural underemployment.     

Warranty markets and public policy

Search equilibrium models in the Economics of Information concern themselves exclusively with consumer ignorance of the prices that different firms charge. Legal regulation dealing with information, on the other hand, concerns itself primarily with contact terms. In particular, firms are often required to warrant against product related defects on the supposed ground that firms respond to consumer ignorance only by degrading contract quality. This paper is the beginning of an attempt to make the Economics of Information useful to policymakers. It models a market for warranties under imperfect information and shows that firms are more likely to respond to consumer ignorance by raising prices for the warranties that consumers prefer rather than deleting warranties from consumer contracts. Hence, policymakers should be concerned more with reducing supracompetitive prices than with “improving” contract quality.     

Giving overseas and public policy

Remarkable numbers of people give to overseas development charities. The aim of this paper is to consider how such overseas giving is best modelled and the implications for public policy. Widely used theories of charitable giving, based on warm-glow or the provision of public goods, provide insight but are not fully satisfactory as explanations of giving for the specific purpose of development. Instead, an “identification” approach to individual giving is proposed here that combines the results focus of the public goods formulation with the scale of the warm-glow model. The theoretical model is used to examine the implications for public policy, including the extent to which official aid crowds out private giving and how public policy should take account of private willingness to make charitable transfers overseas.