Education Subsidies, Social Security and Growth: The Implications of a Demographic Shock

We develop a three-period overlapping-generations model in which individual decisions about education are the engine of growth. In this setting, we investigate the normative role of education subsidies and old age pensions. Calibrating this model on empirical data, it is shown that the case for positive pension benefits is rather weak on the optimal path. An important part of education subsidies should be financed by lump-sum taxes on retirees. We also examine how these transfers should be adjusted in the presence of a baby boom-baby bust demographic shock. It turns out that an appropriate policy could be to increase education when the baby-boom generation is at work. Labor productivity will then be higher when aging peaks so that the pension bill can be financed without reducing welfare for the baby-bust generations.
JEL classification : O 41; J 24; E 62     

Toward a Horizonal Theory of Justice: Efficiency,Equity, Rights and Capabilities in a Free Market Economy

The theory of planning horizons and their relation to pricing, conscience and learning has been explored in some detail in terms of efficiency attributes and ecological health (Jennings 2003, Journal of Economic Issues 39:365-373, 2005, 2007a, b, 2008a). This paper addresses the equity implications of planning horizons in terms of the social role and importance of justice, rights and capabilities in a free market economy. From my earlier work, cooperation—not competition—is seen as the means to longer and broader horizons in an efficiency frame, mitigating any alleged tradeoff against equity issues. The impact of longer horizons on fairness and justice in terms of intentions and outcomes along with rights and capabilities still remains unexplored. This paper reviews the normative aspects of planning horizons, showing how ethical and ecological conscience spreads with horizon effects, strengthening goals of fairness and the internalization of social effects. In this setting, capabilities and empowerment are enhanced by respect for human rights, as social conscience spreads through interhorizonal complementarities. The features of a long-horizon world differ from myopic contexts, specifically in the relation of efficiency to other goals. This paper examines that difference in terms of its equity aspects, with regard to social justice and the role of rights and capabilities in economic cultures.     

Heterodox Economics and its Critics

Heterodox economics has its critics. Most of the criticisms are friendly comments and analysis directed towards improving heterodox economic theory. However, the critics and their criticisms that are the concern of this article are the ones that challenge the existence of heterodox economic theory and the community of heterodox economists as manifested through their graduate programs, conferences, journals and identity. These critics observe that the academic status quo in economics, as manifested in its department and journal rankings, rules of academic engagement, and its institutions and organizations, favor mainstream economics and that it is unlikely to change in the future. Consequently, they argue that heterodox economists can survive only if they become more like mainstream economists. With focus on assimilation, the critics direct their criticisms towards the social characteristics of the heterodox community and to the personal characteristics of heterodox economists. This article is a response to the critics.     

Environmental versus Human-Induced Scarcity in the Commons: Do They Trigger the Same Response?

We study appropriation strategies in common pool resources where extinction is a credible threat. Here we present an experimental study of the appropriation of common pool resources in a dynamic setting where resource availability depends on the initial environmental characteristics of the common resource and on human-induced resource depletion due to users’ appropriation patterns. Our results show that initial resource scarcity limits appropriation by inducing an initial caution among users that persists throughout of the game. Additionally, we find that subjects restrain their appropriation strategies when scarcity increases. However, this concern for resource scarcity is not enough to prevent resource depletion. Agents do not counteract the previous rounds’ appropriation strategies but follow the appropriation trend. High appropriation levels are followed by higher appropriation strategies, thus promoting the well known tragedy of the commons. Often concern for resource preservation is not great enough to limit appropriation.      

Tourism development and behavioural changes: evidences from Ratanakiri province,Kingdom of Cambodia

This research paper presents the findings of a research undertaken in Ratanakiri province, Kingdom of Cambodia (Under the RETA 6190 ADB TA project on ‘Preventing the Trafficking of Women and Children and Promoting Safe Migration in the GMS’), with the aim to evaluate the impact of an airport rehabilitation project. It highlights the role that infrastructure development, with a focus on tourism-related projects, can play in a remote rural area and its consequences on local population, especially ethnic minorities. For remote areas, tourism is considered as an accelerating influence on globalisation and in-migration, which, in turn, are seen as the main factors affecting remote local communities to modify behaviours changing from valuing utility to valuing exchange. The rapidity of these cultural changes increase rural depopulation and the vulnerability of human beings to a range of negative situational factors, including loss of land, erosion of community structures and coping mechanisms, and as well as exploitative practices such as debt bondage, prostitution and human trafficking.     

What Does it Mean to be Human? A Comparison of Primate Economies

Synopsis: Since the beginning of serious field studies of nonhuman primates in the early 1930s, many primatologists have been arguing that humans and their simian cousins differ much less than commonly believed. Little systematic attention, however, has focused on the degree to which the foraging economies of human and nonhuman primates are similar or different. Using a comparative method I investigate consumption, organization of production (including technology), distribution, and property relations. Humans and nonhuman primates differ in their division of labor, food distribution, the use of special tools and techniques, and possessing a home base. More importantly, the economic activities of humans, unlike monkeys and apes, are structured through economic institutions, which are mutable. This revised version was published online in July 2006 with corrections to the Cover Date.     

National Values and Economic Growth

A bstract    Using data on economic values and attitudes for various nations from the World Value Study, I show that the strength of values associated with market success does not appear to have a significant impact on the rate of economic growth in a sample of developing and developed market economies. I also show that such values do not seem related to the economic system and have an ambiguous relation to the overall level of economic development. These negative results suggest that, contrary to common belief, knowledge about such values does not seem very useful in helping us understand economic growth or differences in levels of economic development or economic systems in various countries.