Indonesian Local Government Spending,Taxing and Saving: An Explanation of Pre‐ and Post‐decentralization Fiscal Outcomes*

As a result of Indonesia's decentralization program, local governments have gained significantly more responsibility for service delivery, considerably larger fiscal resources, and much greater authority over the use of those resources than before. The present paper develops a simple budget model to describe and explain the substantial differences in pre‐ and post‐decentralization local government fiscal behavior related to spending, taxing and saving. During the post‐decentralization period special attention is paid to the fiscal behavior of natural resource rich regions. Among other things, the evidence suggests that: post‐decentralization local government spending is partly responsive to increasing needs and partly the subject of elite capture; local government taxation has become more aggressive under decentralization and appears to be mostly driven by local bureaucratic expectations related to routine overhead budgets; and the increased savings of local governments during the post‐decentralization period is determined to a large degree by delayed central government transfer payments.     

Employment,schooling and productivity growth

Summary This paper presents an empirical analysis of labour demand and labour productivity growth in The Netherlands. Assuming an aggregate production function with as factors capital and 3 types of labour, distinguished by educational attainment, cost minimization leads to a set of 3 labour demand relations to be estimated on time series data. Using the estimates and the implied elasticities, aggregate labour productivity growth is decomposed into factor substitution, autonomous factors, labour time shortening, economies of scale, utilization rates and the increased educational level of the working population. The contributions of substitution, utilization rates and education appear to be substantial, notably in the seventies.

List of symbols

Variables a _i Efficiency index of skill leveli - C production - h _i working-time index for skill leveli - g _i steady-state growth rate of skill leveli - K capital stock - L _i employment volume of skill leveli - L _i ^* desired level of labour skill leveli - p output price - p ^* desired output price - s _i ^* long-run static labour shares in the production value - p _k rental price of capital - P index of total factor productivity - P _l index of labour productivity - u _i utilization rate of skill leveli - u _k utilization rate of capital - w _i wage rate for skill leveli - y production volume - y _yij Hicks partial elasticities of complementarity - _i steady-state cost share of skill leveli - _k Bk steady-state cost share of capital - _f lf highest level price index in cost function nesting - _g 4 intermediate level price index in cost function nesting - _h 4 lowest level price index in cost function nesting - _i steady-state relative wage share of skill leveli - _ij Allen partial elasticities of substitution Parameters d _i l adjustment speed of skill leveli - d _p price adjustment speed - M mark-up on marginal costs - scale elasticity of production - _i distribution parameter in cost function,i = 3, g - _i distribution parameter in cost function,i = k, h - _i distribution parameter in cost function,i =1, 2 - _i autonomous labour productivity growth for skill leveli - _i cost share of skill level in base year - _f production cost index in base year - _i hours elasticity in labour efficiency index - group elasticity of substitution betweenL ₃ and (K, (L ₁,L ₂)) - _g Og group elasticity of substitution betweenK and (L ₁,L ₂) - _h 6h group elasticity of substitution betweenL ₁ andL ₂ We would like to thank B. Downey, G.M.M. Gelauff, A. Nieuwenhuis, J.M.M. Ritzen, J.C. Siebrand and an unknown referee for helpful comments on earlier drafts.     

Boundedly complete families which are not complete

Summary Completeness of a family of probability distributions implies its bounded completeness but not conversely. An example of a family which is boundedly complete but not complete was presented by Lehmann and Scheffe [5]. This appears to be the only such example quoted in the statistical literature. The purpose of this note is to provide further examples of this type. It is shown that any given family of power series distributions can be used to construct a class containing infinitely many boundedly complete, but not complete, families. Furthermore, it is shown that the family of continuous distributions , is boundedly complete, but not complete, whereU denotes the uniform distribution on [a, b] and {P _ϑ,ϑ ∈ IR}, is a translation family generated by a distributionP ₀ with mean value zero, which is continuous with respect to the Lebesgue measure.     

Educational attainment and cohort size

"We argue that the postwar baby boom [in the United States] caused substantial fluctuations in both the economic rewards to education and educational attainment over the last 3 decades. If substitutability between young and old workers diminishes with education, the present value of lifetime earnings for a boom cohort is depressed more for highly educated workers, reducing incentives for educational attainment. The opposite is true for pre- and postboom cohorts. The diminishing substitutability hypothesis explains the declines in both the returns to college and college completion rates in the 1970s and predicts a substantial increase in educational attainment for postboomers."     

Agricultural practices in Eastern Maputaland

The various agricultural practices employed in eastern Maputaland are described.

Agricultural strategies utilized in Maputaland are low in productivity but aim to minimize risk. The area is marginal for agriculture as soils are sandy and rainfall unreliable. Insects and plant diseases accentuate the problem. Infrastructure is lacking in the area. Traditional agricultural systems predominate.

Farming in the area is generally of a subsistence nature and can be divided into gardening, swamp farming and field cropping. Steps towards modernization of agriculture must take into account all existing constraints.     

Maximizing purchase decision factors other than price

Assessing and acquiring technology does not have to be chaotic, driven solely by price, clinical preference, and emotion. With the tools available, it can be distilled to a process of organized common sense, which results in maximum flexibility for the user and allows materiel managers to procure the best, most cost-effective equipment for the hospital.     

The case of the unpopular pay plan

Three years after launching the team-based Quality For All program, Top Chemical Company CEO Sam Verde was searching for a team-based compensation system that would reflect his company's new philosophy. With a committee gathered to discuss the issue, Verde confronts the fact that changing pay plans is an issue few people can agree on. "Very simply," explains vice president for compensation Gilbert Porterfield, "the plan is designed to give employees working on teams real incentives for constant improvement and overall excellence. The variable aspect of the system pays employees for the performance of their group." This doesn't sit well with the others. "It's going to punish teams like mine for the failings of others instead of rewarding us for the work we do and have already done," says packaging team representative Ruth Gibson. Another committee member feels that team-based anything is a "motivational happy land that doesn't square with how people really work." While Verde likes the proposed pay plan, he has doubts over whether his employees will accept the risk. Upper management has no problem basing 60% of its pay on TopChem's performance. But getting line employees to risk part of their salaries--even as little as 4%--on the ups and downs of the chemical industry may be more trouble than it's worth. Four experts on compensation reveal where Top Chemical went wrong in its plan and how Sam Verde might bring about change successfully.