Intellectual Property Rights in the Asian-Pacific Region: problems, patterns, and policy

This paper explores recent theory and evidence regarding increased protection of intellectual property rights (ZPRs) in Asia. Knowledge has significant public good aspects making optimal provision a problem of trading off universal access against adequate incentives for R&D. Given the ease of evasion of IPR relative to tariffs, attempts to push low and middleincome countries to higher levels of protection may be against their national interests. The Uruguay Round may encounter less than enthusiastic enforcement. Further efforts to refine IPR protection might usefully be focused on flexibility instead of harmonisation.     

External orientation and domestic market promotion

The increasing differentiation among developing countries, revealed by many indicators, also suggests that they have need of differing trade and development strategies. The following article reviews the across-the-board advice offered by agencies including the World Bank to “the” developing countries—“outward-orientation”, integration into the world economy, trade liberalisation-in the light of persistent shortages of foreign exchange and the limited capacity for structural adjustment, diversification and raising export levels in low-income primary commodity, exporting countries.     

The prognosis and surveillance of risks from commercial credit borrowers

This paper reports the main results of an empirical research project dealing with the prognosis and surveillance of corporate credit risks. In the course of the research programme both quantitative (balance sheet analysis, current accounts data analysis) and qualitative (assessment of management) methods were applied. Each of the three parts of the project is independently usable However, the combined application of the three approaches avoids deficiencies of using only one of the components and improves the early detection of credit risks.     

The impact of risk-based regulation on European insurers’ investment strategy

This paper examines the impact of Solvency II on the attainability of target returns, the attainability of portfolio efficiency and the asset allocation of European insurers. I start with a brief introduction to the Solvency II Directive, focusing on the rules for calculating solvency capital requirements (SCR) according to the Solvency II standard formula. The subsequent numerical analysis includes several portfolio optimizations focusing on six relevant asset classes for the 1993–2017 time period. I derive optimal portfolios with respect to the Solvency II capital requirements, with respect to conventional risk measures, and I combine both optimization problems. My results show that the capital requirements according to Solvency II are not adequately calibrated. Nevertheless, due to a solid equity base, the majority of European insurers are still able to attain high target returns and mean-variance-efficiency. However, undercapitalized insurers are not able to hold risk-optimal allocations of equities, real estate and hedge funds any longer. In an environment of very low interest rates, these insurers may also face difficulties obtaining their target returns. To the best of my knowledge, this is the first paper to explicitly incorporate the solvency capital requirement as a numerical constraint into the insurers’ portfolio optimization problem. As a result, my approach first provides insights about the attainable target return and the asset weights as a direct function of insurers’ equity.     

Where are the rent seekers?

In a remarkably simple and yet one of the most original and insightful observations of 20th century economics, Gordon Tullock pointed out that there are efficiency losses when public policies and political behavior create contestable rents. Tullock also observed that social losses from contesting rents appeared smaller than might be expected, so raising the question ‘where are the rent seekers?’ Tullock proposed that political accountability and ‘free-riding’ incentives in interest groups limit social losses from rent seeking. We affirm Tullock’s explanations, which apply differently under different political institutions. We compare Tullock with Gary Becker, who focused on deadweight losses from redistribution and concluded, in contrast to Tullock, that political redistribution is efficient. The comparison with Becker highlights the significance of the recognition of Tullock’s concept of rent seeking. By excluding rent-seeking losses from the social costs of redistribution, Becker could arrive at a conclusion more favorable than Tullock to an ideology that sees merit in extensive redistribution. Tullock’s model, although more encompassing of actual social costs of redistribution, would have been less welcome in the social democratic welfare state.