Political Profit: Taxing and Spending in the Hierarchical State

A bstract . The actions of government fall into two types: taxes (the taking of property ) and expenditures (the awarding of gifts ). Politicians profit as long as the value of resources raised from taxation exceeds the cost of expenditures. From their point of view, fiscal efficiency consists in maximizing the support obtained by spending and minimizing the opposition generated by taxing. This is accomplished by spending on well-organized groups and taxing the uninformed public. This results in the "iron law of political redistribution" in which income and wealth are transferred from the latter to the former. In a hierarchical State , it is usually profitable for those at the top to centralize control over taxing and spending, if for no other reason than to make it difficult for politicians at lower levels to compete against them. This gives rise to the "law of hierarchical centralization "—in a hierarchical State, power becomes centralized over time. The greater the power of government, the faster this process takes place. In order to avoid this problem, one could design constitutions which are non-hierarchical in nature, in which each unit of government is completely autonomous from the others, as firms are in a free market.     

Benefit-cost analysis of family planning

A stochastic model is developed to estimate the expected social costs with and without a family planning program provided to a population. By examining the tradeoffs between the program costs and the costs of unwanted pregnancies, it is possible to estimate the costs and benefits of alternative family planning programs. Several extensions of the basic model are presented which permit the selection of optimal treatment variables for administration of a particular program as well as determining the long range effects of a particular family planning program.     

Analysis of arrest rates for trends in criminality

During the 1960s, the United States experienced a substantial increase in crime with the rates of reported crime more than doubling. It has been postulated that the increase in the proportion of young adults in the population which also occurred during the Sixties is a primary factor in the increase in crime. In this paper, we attempt to explore this question by partitioning the recent increases in rates between an increasing crime-committing propensity for various demographic groups on one hand, and a changing demographic mix to the other. We do this by analyzing arrest rates by demographic group over time. However, since arrest rates are a complex function of both criminality and police activity, a model is developed which attempts to distinguish between these phenomena. The model is estimated using data on age, race, and sex-specific arrest rates for Pittsburgh residents over the period 1967–1972. The results of the analysis suggest that there has been no significant increase in criminality for men in the Pittsburgh population, while there is some evidence of increased criminality for women. However, this increase may reflect an increased willingness of the police to arrest women. We hesitate to generalize our conclusions too widely from the experience of a single urban center. Additional analysis, using the model developed here, of arrest rates from other cities or regions would do much to illuminate this very significant issue.     

Analysing the wealth effects of UK divestitures: An examination of domestic and international sales

Here we analyse divestiture announcement effects for UK multinational corporations accounting for the location of the unit sold. We find some bias in market reactions with larger abnormal returns for UK divestitures when compared to overseas sales. US sales generate larger returns than those in Continental Europe or the Asia-Pacific region. We analyse the determinants of abnormal returns using accounting and transaction data, supplemented with country specific data for overseas sales. Abnormal returns for UK sales are explained by financial characteristics of the selling firm but the size of the transaction relative to the firm is the most significant factor in overseas divestitures.     

The dialectics of competency acquisition: pollution prevention in electric generation

Strategy researchers now recognize that distinctive competencies are critically important for sustained competitive advantage. The processes by which such competencies are acquired, however, has only started to be examined. Connections between macro-industrial system level properties and micro-developments in proprietary technology at the firm level need to be made. This paper argues that system-wide properties, such as long-standing elementary and opposing logics in societal forces like governments and markets, and micro-developments, such as the firm's capacity to search for talent, technology, and ideas and to harmonize what it learns internally, can contribute in significant ways to the creation and acquisition of new competencies. Based on the case of pollution prevention in electric generation, it shows how the system-wide properties channel and direct the paths that the acquisition of new competencies take and how they interact with micro-developments at the firm level. © 1998 John Wiley & Sons, Ltd.     

TAXATION IN MATCHING MARKETS

We analyze the effects of taxation in two-sided matching markets where agents have heterogeneous preferences over potential partners. Our model provides a continuous link between models of matching with and without transfers. Taxes generate inefficiency on the allocative margin, by changing who matches with whom. This allocative inefficiency can be nonmonotonic, but is weakly increasing in the tax rate under linear taxation if each worker has negative nonpecuniary utility of working. We adapt existing econometric methods for markets without taxes to our setting, and estimate preferences in the college-coach football market. We show through simulations that standard methods inaccurately measure deadweight loss.     

How ongoing structural change creates a double dividend: outdating of technologies and green growth

Portuguese Economic Journal - In this paper we study how the ongoing transition to newer technologies, what we refer to as dynamic structural change, in a doubly-differentiated R&D-based...     

Estimating firm-level and country-level effects in cross-sectional analyses: An application of hierarchical modeling in corporate disclosure studies

Researchers in the field of international accounting are often confronted with observations of firms clustered into higher-level units such as countries. Using data from a corporate disclosure study including 797 firm observations from 34 countries, we demonstrate that the inferences obtained from the most commonly used Ordinary Least Square (OLS) test, which pools the firm and country data either under the disaggregation or aggregation approach, are problematic and misleading. To overcome the methodological limitation, we subsequently employ hierarchical modeling to simultaneously estimate both firm-level (within-country) and country-level (cross-country) disclosure determinants. We find that the clustering effects are significant in almost all firm-level variables. Once such effects are adjusted, only three firm-specific variables are significantly associated with corporate disclosure. Evidence provided by this study has important implications for most international accounting studies conducted in cross-level contexts.