A modified yardstick competition mechanism

This paper expands Shleifer’s (Rand J Econ 16:319–327, 1985) theory of yardstick competition and develops a modified yardstick competition mechanism (MYC), where the yardstick employed consists of a tariff basket and total costs. This mechanism has a significant information advantage: the regulator “only” needs to observe total costs, prices and output of all firms. The MYC mechanism can ensure a socially optimal outcome when allowing for spatial and second degree price discrimination. We also introduce regulatory lags to the model. In addition, we compare the two approaches for the case of unobserved firm heterogeneity, and provide numerical estimations of the effects. The MYC mechanism fares better in the case of unobserved heterogeneity, and may thus be a useful extension of Shleifer’s yardstick mechanism.      

War die Strommarkt-Liberalisierung in Deutschland bisher ein Flop?

By observing the last 10 years of power market reform in Germany, this paper challenges the public view that the first Energiewirtschaftsgesetz (EnWG) from 1998 had less impact on market liberalization than the second EnWG from 2005. According to the author, the opposite is true, at least in the power sector, if traditional competition indicators such as efficiency of the sector, institutional changes and electricity prices are taken as reference. While the first EnWG had changed much in the direction of liberalization and competition, progress since 2005 is rather slow — with the exception of the number of supplier shifts on the retail level and the installation of a regulation authority. The discrepancies between reality and public perception claim for a sound theoretical analysis, from which conclusions can be drawn concerning the further direction of the electricity market regulation.     

Das Bedingungslose Grundeinkommen — ein tragfähiges Konzept?

The introduction of an unconditional basic income has been discussed in Switzerland for many years. Germany, however, takes a sceptical view of this idea. The authors of this ?Zeitgespräch“ express disparate opinions on how broadly the concept should be defined, but they agree on the motive behind the concept: respect for human dignity. Moreover, it may make many social policy rules obsolete. There are conflicting opinions concerning the reaction of labour supply to the unconditional basic income. Some authors fear that it will shrink substantially. But its financing will be the main problem. There are proposals to increase the value added tax rate. The economic impacts of funding it by income tax revenues are analysed using a macroeconomic model. Ultimately, the implementation of the concept will have distributional effects which are very difficult to predict.     

The Organizational Implementation of Corporate Citizenship: An Assessment Tool and its Application at UN Global Compact Participants

The corporate citizenship (CC) concept introduced by Dirk Matten and Andrew Crane has been well received. To this date, however, empirical studies based on this concept are lacking. In this article, we flesh out and operationalize the CC concept and develop an assessment tool for CC. Our tool focuses on the organizational level and assesses the embeddedness of CC in organizational structures and procedures. To illustrate the applicability of the tool, we assess five Swiss companies (ABB, Credit Suisse, Nestlé, Novartis, and UBS). These five companies are participants of the UN Global Compact (UNGC), currently the largest collaborative strategic policy initiative for business in the world (www.unglobalcompact.org). This study makes four main contributions: (1) it enriches and operationalizes Matten and Crane’s CC definition to build a concept of CC that can be operationalized, (2) it develops an analytical tool to assess the organizational embeddedness of CC, (3) it generates empirical insights into how five multinational corporations have approached CC, and (4) it presents assessment results that provide indications how global governance initiatives like the UNGC can support the implementation of CC.     

Localised Technological Progress And Intra-Sectoral Structures Of Employment

In this paper we put forward a model that explains a firm's employment growth with the degree of technological efficiency and labour costs. To measure efficiency, we use a non-parametric linear programming method. DEA. The results of empirical analysis of 450 firms in 12 manufacturing sectors confirm that innovative firms experience stronger employment growth. Because the demand growth effect of technological leadership outweighs the factor saving effect, firms which m technological leaders are in most cases the creators of jobs. Technologically backward firms, on the other hand, have few options to compensate their demand loss probably caused by deteriorating competitiveness. Consequently, their employment growth is relatively weak. The employment growth additionally depends on the type of factor combination, i.e. the technological trajectory chosen by an individual firm. The trajectory's effects vary significantly across industries. The effect of labour costs is generally negative. However, technologically leading industries are. less sensitive to increases in labour costs than nature industries.     

Perspektiven der Doha–Entwicklungsrunde

Die Doha-Runde hat im Sommer 2004 wieder Tritt gefasst. Wo steht sie heute? Wird die Förderung wirtschaftlicher und sozialer Entwicklung zum „Hauptstrom“ der Verhandlungen? Verträgt sich multilaterale Liberalisierung mit regionaler und bilateraler Marktöffnung? Ist eine institutionelle Reform der WTO notwendig? Wie könnte sie aussehen?Georg Koopmann, 59, Dipl.-Volkswirt, ist wissenschaftlicher Mitarbeiter in der Abteilung „Weltwirtschaft“ im Hamburgischen Welt-Wirtschafts_Archiv (HWWA).*Dieser Artikel basiert auf einem Beitrag des Verfassers für den am 7./8. Juni 2005 vom Entwicklungspolitischen Forum (EF) der InWEnt gGmbH in Berlin veranstalteten internationalen Politikdialog „Doha Entwicklungsrunde: Stand und Erfolgsaussichten“.     

Budget Incidence Reconsidered

The paper develops a theoretical framework for analyzing budget incidence. The welfare gain of consuming a public good is determined by the benefit approach. On this basis the incidence of taxation, benefits and net benefits is investigated. Measures of progression are proposed. It is shown that the joint incidence of governmental taxation and expenditure can be related to residual progression and the income elasticity of the marginal willingness to pay for the public good. An example demonstrates that progressive taxation can be overcompensated by a distribution of benefits which favors the rich.     

Agricultural problems of the accession of Greece,Portugal and Spain to the EC

Apart from other issues raised by the inclusion of Greece, Portugal and Spain in the European Community, it will make the Common Agricultural Policy more difficult rather than easier. Georg Gallus, Secretary of State of the Federal Ministry of Food, Agriculture and Forests, discusses the new agricultural problems the Community, the acceding states and third countries will have to live with.     

Pitfalls in Restructuring the Electricity Industry

Abstract. This paper models some reductions in output that may follow the opening of electricity markets to competition. Specifically, we show that vertical separation of electricity generation, transmission and distribution could reduce welfare compared to the previous system of vertically integrated monopoly, if grid owners can act as monopolistic retailers or, alternatively, set access prices that maximize merchandizing surplus. Moreover, we show that a rule of non‐discriminatory pricing would not remedy any of these problems. Hence, to secure the efficiency gains of deregulation, the re‐regulation of the remaining monopolistic core – the electric grid – cannot rely on simple rules like cost‐based non‐discriminatory pricing.