Lifetime Generational Accounts for the Netherlands*

Conventional generational accounting only includes future benefits and burdens from the government. This paper's contribution is to include past benefits and burdens as well, and in this way to provide a full lifetime account of how much current and future generations benefit from government, in net terms, under various future policy lines. The calculations are carried out for the Netherlands and for the cohorts born since 1946. The more complete picture may be helpful for political decision‐making on equitable intergenerational policies. A second contribution of this paper is that it uses a more comprehensive benefit concept than other such backward‐looking studies by including non‐cash benefits as well. The results point out that there are substantial differences in net lifetime benefits between generations and these are mainly driven by non‐cash benefits such as education and healthcare, on which expenditure increased substantially after 1946.     

Bank valuation and accounting discretion during a financial crisis

This paper shows that banks overstate the value of distressed assets and their regulatory capital during the US mortgage crisis. Real estate-related assets are overvalued in banks' balance sheets, especially those of bigger banks, compared to the market value of these assets. Banks with large exposure to mortgage-backed securities also provision less for bad loans. Furthermore, distressed banks use discretion over the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks and provide suggestive evidence of regulatory forbearance and noncompliance with accounting rules.     

Bilateral foreign aid: how important is aid effectiveness to people for choosing countries to support?

We conduct a discrete choice experiment to determine how important aid effectiveness is to people relative to other criteria for choosing countries to support with bilateral foreign aid. We find that aid effectiveness is important, on a par with recipient-country need as proxied by the level of hunger and malnutrition. Both criteria are more important than others.     

Agglomeration Economies and Productivity Growth in Manufacturing Industry: Empirical Evidence from Indonesia

This study examines the effect of agglomeration economies on productivity growth in Indonesian manufacturing industries during the first decade of this century. Productivity growth is measured at the firm level using the Färe‐Primont Productivity Index. Each firm's productivity growth is then regressed against a set of firm and industry characteristics, including three measures of agglomeration representing the effects of specialisation, diversity and competition. The results show evidence of a positive specialisation effect and a negative diversity effect for aggregate manufacturing and sub‐sectors. Furthermore, there are mixed effects across industries, suggesting that Porter's competition externalities stimulate firm productivity growth under some conditions but not others.     

Has regulatory reform had any impact on bank efficiency in Indonesia? A two-stage analysis

More than a decade following the severe economic crisis 1997, Indonesia has undergone major regulatory changes in its banking industry. This article examines the impact of these regulatory changes on the relative technical efficiency (TE) of the Indonesian banking industry employing data envelopment analysis (DEA) and censored Tobit regression model. Additionally, the bootstrap approach of Simar and Wilson is employed to provide statistical properties to the DEA efficiency score. The findings show that the industry on average is inefficient over the period of analysis. Also, state-owned and foreign-owned banks are found to be more efficient than any other group of banks. Finally, the impact of regulatory reforms is generally positive and statistically significant.     

On the merits of plant-based proteins for global food security: Marrying macro and micro perspectives

This paper aims to demonstrate the importance of protein production for the global environment and to give insight into the way consumers frame the protein part of their meal. Using a macro perspective, it presents a review of the literature on current and future impacts of the nutritional transition that has made animals the chief source of protein in many countries. Protein-related environmental pressure is put into the perspective of a number of vital Earth-system processes whose boundaries have already been overstepped or are under threat of transgression. To inform policy-makers about these linkages a long-term global food security frame is proposed. Using a micro perspective, survey data on consumers reveal that their frames and habits are strongly adapted to the current meat system. Although this system has induced some pickiness about meat as well as uneasiness about meat's animal origin, there is a large psychological distance between consumers and experts in their view of protein sources. It is suggested that a global food security frame may help to bridge this distance by creating overlapping frames, capturing both altruistic aspects and a reasonable measure of self-interest. This may enable a novel protein transition, featuring a greater share of plant-based protein.     

The 2002 U.S. Farm Bill: What's In It For CAP and WTO Reform?

The 2002 U.S. Farm Bill: What's In It For CAP and WTO Reform? The 2002 U.S. Farm Bill (the Farm Security and Rural Investment Act or FSRIA) provides considerably more government subsidies for U.S. agriculture than Congress envisaged when it passed the preceding 1996–2002 FAIR Act. We review the FAIR record, showing how government subsidies increased greatly beyond those originally scheduled. For FSRIA, we outline key commodity, trade, and conservation and environmental provisions. We expect that the commodity programmes will: (a) encourage production when the market calls for less; (b) significantly increase subsidies over FAIR baseline subsidies; (c) press against current WTO and possible Doha Round support limits; and (d) aggravate trading partners. Finally, we suggest two lessons from the U.S. policy experience that might benefit those working on CAP and WTO reform. First, past research shows that farm programmes have little to do with the economic health of rural communities. Second, programme transparency, and especially public disclosure of the level of payments going to individual farmers, by name, influences the farm policy debate. Personalized data show what economists have long maintained—that the bulk of programme benefits go to a relatively few, large, producers—but do so in a way that captures the public and policy‐makers' attention. La loi d'orientation agricole américaine de 2002: que peut on en tirer pour réformer la PAC et l'OMC? La loi d'orientation agricole américaine de 2002 (loi sur la securité et l'investissement rural, ou FSRIA) autorise beaucoup plus de subventions a l'agriculture des Etats Unis qu'il n'avait été envisagé par le congrès quand fut votée la loi d'orientation précédente, le “Fair Act” en vigueur de 1996 à 2002. L'examen du Fair Act réalisé ici montre que les subventions durant cette période avaient déjà augmenté beaucoup plus qu'il n‘était initialement prévu. Dans le cas du FSRIA, des provisions importantes sont prévues pour les produits clé, le commerce, la conservation des sols, et l'environnement. Il faut s'attendre à ce que les programmes par produit: (a): encouragent la production alors même que le marché en demanderait la réduction, (b) accroissent significativement les subventions par rapport au niveau de base du Fair Act (c) exercent une pression à la hausse sur les limites imposées aux soutiens, tant dans la réglementation actuelle de l'OMC que dans celle qui pourrait être adopté dans les négociation de Doha (d) lèsent gravement les partenaires commerciaux des Etats Unis. Pour finir, deux enseignements de la politique américaine pourraient être utiles à ceux qui, en Europe, songent à réformer l'OMC et la PAC: d'abord, l'histoire montre que les subventions n'ont pas grand chose à voir avec la santééconomique des communautés rurales. Ensuite, la transparence des programmes en question, et tout spécialement, l'affichage nominatif des bénéficiaires de subventions, est de nature à influer sur le débar de politique agricole. Les données personnalisées montrent ce que les économistes out toujours dit: les subventions bénéficient pour l'essentiel à un petit nombre de producteurs relativement riches, mais d'une façon telle qu'ils arrivent à mobiliser l'opinion et les décideurs politiques en leur faveur. Das US‐Landwirtschaftsgesetz von 2002: Wie wirkt es sich auf GAP und WTO‐Reform aus? Das US‐Landwirtschaftsgesetz von 2002 (FSRIA, Gesetz zur Absicherung von landwirtschaftlichen Betrieben und zur Förderung von Investitionen in ländlichen Räumen) sieht wesentlich höhere staatliche Subventionen für die Landwirtschaft der USA vor als es der Kongress bei tier Verabschiedung des FAIR‐Gesetzes (1996–2002) beabsichtigte. Die Subventionen haben während der Laufzeit des Gesetzes die vorgesehene Höhe weit überschritten. Für das FSRIA werden die Bestimmungen für die Hauptagrarprodukte, den Handel und den Umweltschutz kurz dargestellt. Es ist zu erwarten, dass die Programme (a) die landwirtschaftliche Produktion in Perioden anregen, in denen die Weltmarktpreise niedrig sind; (b) die Subventionen weit über den im FAIR‐Gesetz vorgesehenen Betrag hinaus erhöhen; (c) gegen das in der WTO festgeschriebene und zukünftig in der Doha‐Runde wahrscheinliche gekürzte Stützungsniveau verstoßon können und (d) die Missbilligung der Handelspartner hervorrufen werden. Aus der Erfahrung mit der US‐Politik greifen wir zum Schluss zwei Erkenntnisse heraus, die für diejenigen hilfreich sein können, die sich mit der GAP und der WTO‐Reform beschäftigen. Erstens zeigt die bisherige Forschung, dass die Programme zur Förderung von landwirtschaftlichen Betrieben nur wenig zum wirtschaftlichen Wohlergehen ländlicher Räume beitragen. Zweitens beeinflusst die Transparenz der Programme die politische Debatte in Bezug auf landwirtschaftliche Betriebe – insbesondere durch die öffentliche Nennung der Höhe der Zahlungssummen und der Namen der Empfänger. Diese personalisierten Daten zeigen, was Wirtschaftswissenschaftler bereits seit langem behaupten – dass relativ wenige Großerzeuger am meisten von den Programmen profitieren und dabei die Aufmerksamkeit der Öffentlichkeit und die der politischen Entscheidungsträger auf sich ziehen.     

THE ECONOMIC POLITY OF FARM POLICY

A review of the ‘new political economy’ of agricultural policies includes models of social income maximising governments, collective action by ‘pressure groups’, and the interaction between politicians and voters. An alternative explanation for Olson's “social by-product” theory for why farmers received massive subsidies as a large group is also presented. An explanation for various patterns of farm policy interventions is given, including why rich countries subsidise and poor countries tax farmers. Finally, the role of public research expenditures and the interaction with commodity policy is explored.