Social dialogues—the state of the art a decade after Maastricht

The article asks whether social dialogues, according the procedures of the Social Protocol and the Amsterdam Treaty, have proved to be valuable instruments able to make major contributions to the development of social integration. More recent developments at the inter‐professional as well as at the sectoral level are evaluated. Furthermore, major trajectories for likely future trends at both levels are highlighted. The final part discusses the problem of whether social dialogues will profit from the introduction of new modes of governance, especially the more recently preferred open method of co‐ordination.     

Ill-behaviour of transformation-frontiers with environmental quality versus pollution

If one looks at environmental quality N as a renewable natural resource (with its own natural dynamics) which is changed by emissions Z, then one gets a better understanding of the shape of the damage function. In the case of a logistic growth dynamics one obtains a well-shaped transformation frontier N(Z), even in a two-species natural dynamics. For a more general natural interaction in the framework of a prey-predator model one obtains the possibilities of a cusp catastrophe which makes the transformation frontier N(Z) ill-shaped for the standard arguments of economists and their most favoured environmental policy instruments.     

Intertemporal Equity and Hartwick's Rule in an Exhaustible Resource Model*

In a standard exhaustible resource model, it is known that if, along a competitive path, investment in the augmentable capital good equals the rents on the exhaustible resource (known as Hartwick's rule), then the path is equitable in the sense that the consumption level is constant over time. In this paper, we show the converse of this result: if a competitive path is equitable, then it must satisfy Hartwick's rule.     

CAP Reforms in the 1990s and their Price and Welfare Implications: The Case of Wheat

We use a nonlinear commodity market model to assess, theoretically and empirically, the impacts of recent reforms of the CAP on prices and economic welfare in the EU. The empirical analysis is based on an aggregate structural econometric model of the EU wheat economy and its links to the rest of the world. Instability issues are also investigated. Impacts of CAP reforms on the variance of domestic and world prices are analysed and a Monte Carlo simulation is used to evaluate uncertainty in the model's welfare computations. Recent reforms led to a net welfare gain within the EU during the period 1993–2000. Additional budgetary costs are less than the welfare gains of consumers and producers. Producers gained as lower price support was overcompensated by additional direct payments.     

Systematic Political Grass–Root Support for Tariffs

The leading political–economy–of–trade models are virtually silent on two fundamental questions raised by Rodrik in 1995. Why are trade policies systematically biased against trade? And why are tariffs rather than more efficient production subsidies adopted to redistribute income? This paper shows that systematic political grass–root support for trade–restricting and inefficient tariffs emerges when the government has a revenue goal and collecting taxes is costly. Even if no tax instrument enjoys an advantage with respect to collection costs and the factor ownership distribution is unbiased, more people support tariffs than import or production subsidies. More generally, the presence of tax–collection costs creates a grass–root support bias for taxes over subsidies as instruments to redistribute income.     

Debt-equity swaps and the heavily indebted countries

In search of solutions to the international debt crisis, attention has recently been focused on a new financing technique, so-called debt-equity swaps. An essential difference between these and the usual swapping of debt into equity is that the former allow a wider range of applications. The following article seeks to elucidate the possible contribution of debt-equity swaps towards easing the debt burden and to estimate the potential for a reduction in external debt and its effect on the balance of payments of the debtor nation.     

The generalized Stackelberg equilibrium of the all-pay auction with complete information

We characterize the equilibrium of the all-pay auction with general convex cost of effort and sequential effort choices. We consider a set of n players who are arbitrarily partitioned into a group of players who choose their efforts ‘early’ and a group of players who choose ‘late’. Only the player with the lowest cost of effort has a positive payoff in any equilibrium. This payoff depends on his own timing vis-a-vis the timing of others. We also show that the choice of timing can be endogenized, in which case the strongest player typically chooses ‘late’, whereas all other players are indifferent with respect to their choice of timing. In the most prominent equilibrium the player with the lowest cost of effort wins the auction at zero aggregate cost. We thank Dan Kovenock and Luis C. Corchón for discussion and helpful comments. The usual caveat applies. Wolfgang Leininger likes to express his gratitude to Wissenschaftszentrum Berlin (WZB) for its generous hospitality and financial support.