The Political Economy of Education and Development in an Open Economy

If the price effect of opening up a developing economy may be expected to act as a disincentive for investment in human capital, the opposite is likely to be true of the income effect, especially in the presence of credit market imperfections among the poor. It is shown in this paper that this may no longer be the case in a society initially dominated by an oligarchic capitalist elite that is afraid of losing its political control in favor of an educated middle class. Although it may sometimes be in its interest to democratize by subsidizing education when the economy is closed, incentives to do so disappear when the economy is open to trade or factor flows.     

Tariffs versus VAT in the presence of heterogeneous firms and an informal sector

The debate over the use of tariffs or value added taxes in developing countries has focused on the difficulty of collecting VAT from the informal sector. This paper contributes by considering this issue with heterogeneous firms and endogenous entry. This yields two results. First, a cut in the tariff reduces the size of the informal sector. Second, the imposition of VAT need not increase the size of the informal sector. Turning to simulation results, we find that switching from a tariff to a revenue-neutral VAT increases welfare, in part because of the selection effect generated by heterogeneous firms.     

Coordinated Effects in the 2010 Horizontal Merger Guidelines

Recent research has highlighted the quantitative contribution to merger analysis from extending unilateral effects models to understand the payoffs to future potential coordinated effects. Some of the emphasis of this research appears to have made its way into the 2010 Horizontal Merger Guidelines. In this paper, we demonstrate the quantification of coordinated effects in an oligopoly and procurement model, and we show that screens that are based on upward pricing pressure are not adequate in mergers where coordinated effects are a potential concern.     

Multidimensional generalized Gini indices

Summary. The axioms that characterize the generalized Gini social evaluation orderings for one-dimensional distributions are extended to the multidimensional attributes case. A social evaluation ordering is shown to have a two-stage aggregation representation if these axioms and a separability assumption are satisfied. In the first stage, the distributions of each attribute are aggregated using generalized Gini social evaluation functions. The functional form of the second-stage aggregator depends on the number of attributes and on which version of a comonotonic additivity axiom is used. The implications of these results for the corresponding multidimensional indices of relative and absolute inequality are also considered.Received: 20 August 2003, Revised: 26 May 2004, JEL Classification Numbers: D63. Correspondence to: John A. WeymarkWe are grateful to our referee for his or her comments.     

LE RENOUVELLEMENT PÉRIODIQUE DES CONTRATS DE CONCESSION: LE CAS DES SERVICES DE L'EAU

RESUME ** :  Le renouvellement régulier des contrats de concession apparaît nécessaire pour bénéficier de concurrence dans certains secteurs, comme l'eau. Nous décrivons les contrats et la règle de renouvellement optimaux dans ce contexte. Ils arbitrent entre les diminutions de coûts, en cas de changement de concessionnaire, et les incitations à investir à long terme du concessionnaire en place. La meilleure information du concessionnaire en place sur des éléments constituant une valeur commune de la concession est importante. Nous montrons que ses conséquences diffèrent fortement du cas des enchères de biens.     

Inter-Industry Wage Differentials: Evidence from Belgium in a Cross-National Perspective

This paper examines the existence and magnitude of inter-industry wage differentials in Belgium. Using the 1995 Structure of Earnings Survey, a rich employer-employee matched database, we find significant sectoral wage differentials among workers who are apparently similar from the point of view of their individual characteristics and working conditions. Results also suggest that these differences derive partly from the features of the employers in each sector (size of the establishment, bargaining regime). In an international perspective, results fit in with findings from earlier studies on the existence of a negative relation between the dispersion of inter-industry wage differentials and the degree of corporatism.     

Walloon & Flemish videotex trials

This article focuses on the problems surrounding ‘compunication’, ie the growing imbrication between electronic computers and telecommunications. (The corresponding French term is télématique). More precisely, the specific problems of videotex systems thrown up by different experiments in Belgium are examined. The CCITT of the ITU uses the term videotex as the generic name referring to all systems that make it possible to gain information through telecommunication networks (Hertzian waves, cable TV distribution networks or telephone lines). Requested information appears on a TV screen (at home, in a place of work or in a public place).