ON THE DETERMINANTS OF EDUCATIONAL CORRUPTION: THE CASE OF UKRAINE

This article utilizes a unique data set to examine the relationship between a group of potential explanatory variables and educational corruption in Ukraine. Our corruption controls include bribing on exams, on term papers, for credit, and for university admission. We use a robust nonparametric approach in order to estimate the probability of bribing across the four different categories. This approach is shown to be robust to a variety of different types of endogeneity often encountered under commonly assumed parametric specifications. Our main findings indicate that corruption perceptions, past bribing behavior, and the perceived criminality of bribery are significant factors for all four categories of bribery. From a policy perspective, we argue that when bribe control enforcement is difficult, anti‐corruption education programs targeting social perceptions of corruption could be appropriate. (JEL K42, J16, C14)     

BARGAINING OVER TAXES AND ENTITLEMENTS IN THE ERA OF UNEQUAL GROWTH

Entitlements have become an increasing component of total government spending in the United States over the last six decades. Using a political-economy model where parties bargain over taxes and entitlements, we argue that such dynamics can be explained by two factors: “unequal growth,” where top earners became richer while the income of the bottom 50% stagnated, and budget rules that provide bargaining power to low-income earners through a “status quo effect.” In a model calibrated to the United States, we show that sustained bargaining power by a party representing the poor results in a rising share of entitlements consistent with the data.     

Considerazioni sulla reciprocita' nei problemi di ottimo

In questo lavoro si stabiliscono alcune condizioni geometriche sull' immagine della funzione di cui si ricerca l'estremo e del vincolo per l'equivalenza tra problemi reciproci di estremo.

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In economics it is sometimes of interest to study constrained extremum problems. We give geometric conditions on the image set of the function of which we search the extremum and of the constrain for the equivalence between some reciprocal extremum problems.

     

Trust and foreign ownership: Evidence from intra‐European foreign direct investments

We use a novel firm‐level dataset to test whether trust affects the volume and the ownership structure FDI across Europe. Our methodology deals with the endogeneity of trust from the investor to the recipient country. We expect such a trust measure to affect investment decisions, and the associated knowledge capital, differently across types of foreign investors. In particular, this effect is expected to be stronger for industrial investors who possess transferable knowledge capital. The data confirm our predictions. Higher trust increases the number and volume of FDIs, but also the probability of co‐investing with a partner from the recipient country.     

The conservation against development paradigm in protected areas: Valuation of ecosystem services in the Doñana social-ecological system (southwestern Spain)

The ecosystems of the Doñana social-ecological system (southwestern Spain) provide numerous ecosystem services to society. We valued the most important ecosystem services through a market-based approach, revealed-preference and stated-preference methods to assess the conservation effectiveness of the Doñana Protected Area, with consideration of existing human activities in surrounding lands. We also analysed the spatial distribution of the ecosystem services beneficiaries and the scale of their related markets. We found a clear trade-off between the local and global market values of ecosystem services because landscape management outside of the Doñana Protected Area promotes the provision of ecosystem services associated with international markets. Our results suggest that a conservation against development model occurs in the Doñana social-ecological system, in which land use intensification takes place outside of the Protected Area borders as a result of promoting marketed ecosystem services, while biodiversity conservation is the main activity inside the Protected Area. We conclude that protected areas should be part of a larger-scale, adaptive landscape management strategy in which conservation planning should be the focal element in coordinating sectoral policies in the context of social-ecological systems.     

GMM estimation of a structural demand model for yogurt and the effects of the introduction of new brands

The demand structure for yogurt is assumed to be properly described by a one level nested logit model that is applied to aggregate market data. Given the presence of endogenous regressors, suitably lagged endogenous variables (Arellano and Bover in J Econom 68:29–51, 1995; Blundell and Bond in J Econom 87:115–143, 1998) are proposed as instrumental variables. The validity of this set of instruments is discussed and price elasticities and marginal costs are recovered from the demand estimates. Total welfare gains associated to the introduction of two new brands by the same manufacturer are finally computed. Prices and profits decreased and total welfare increased.     

THE POLITICS OF FDI EXPROPRIATION

I examine the role of political instability and fractionalization as potential explanations for the lack of capital flows from rich countries to poor countries (i.e., the Lucas Paradox). Using panel data from 1984 to 2014, I document that (i) developed countries exhibit larger inflows of foreign direct investment (FDI), (ii) countries subject to high investment risk (IR) receive low FDI inflows, and (iii) IR is higher in fractionalized and politically unstable economies. These findings suggest a negative relationship between political instability and FDI through the IR channel. I inspect the theoretical mechanism using a dynamic political economy model of redistribution, wherein policymakers can expropriate resources from foreign investors. The proceeds are used to finance group‐specific transfers to domestic workers but hinder economic growth by discouraging FDI. I show that the political equilibrium exhibits overexpropriation and underinvestment.