Tariffs versus VAT in the presence of heterogeneous firms and an informal sector

The debate over the use of tariffs or value added taxes in developing countries has focused on the difficulty of collecting VAT from the informal sector. This paper contributes by considering this issue with heterogeneous firms and endogenous entry. This yields two results. First, a cut in the tariff reduces the size of the informal sector. Second, the imposition of VAT need not increase the size of the informal sector. Turning to simulation results, we find that switching from a tariff to a revenue-neutral VAT increases welfare, in part because of the selection effect generated by heterogeneous firms.     

Reviews

TECs UNDER SCRUTINY.

Finn, D. 1994: A New Partnership? Training and Enterprise Councils and the Voluntary Sector. London: Unemployment Unit, no price given, paper.

Boddy, M. 1995: TECs and Racial Equality: Training, Work Experience and Ethnic Minorities. Bristol: SAUS Publications, £11.50 paper.

REINVENTING A REGION.

Haughton, G. and Whitney, D. (eds) 1994: Reinventing a Region: Restructuring in West Yorkshire. Aldershot: Avebury, £37.50 cased.     

Farmers’ Preferences for New Environmental Policy Instruments: Determining the Acceptability of Cross Compliance for Biodiversity Benefits

This paper addresses the issue of farmers’ views concerning the perceived legitimacy of environmental cross compliance as a governance mechanism. Recent work on the theory of regulation emphasises the importance of the legitimacy ascribed to a regulation in determining the effectiveness with which it can be implemented. The current study outlines a rationale for why this motivational question should receive attention in economic studies of policy design and reports the results of a survey of 102 arable farmers in East Anglia, UK, which investigated the level of support for the principle of cross compliance for biodiversity objectives. It was found that two attitudinal factors, referred to as ‘Stewardship Orientation’ and ‘Technological Beliefs’, were by far the most significant in determining the acceptability of cross compliance in the sample, and that structural and socio‐demographic factors were considerably less important. The study also identified clusters of farmers according to their overall attitudinal orientation. Of the five groups thus categorised, four appeared on average likely to reject cross compliance as a general principle, leaving only the most ‘Environmental’ cluster in support. The policy implications are discussed and some conclusions drawn.     

New Institutional Economics' contribution to strategic groups analysis

Rather than consider the two broad strands of strategic group research—performance‐based and behavior‐based studies—as competing approaches, we argue that they relate to complementary levels of analysis. We present a four‐level framework for analyzing structures within industries drawn from New Institutional Economics (NIE) which covers different approaches to strategic group formation from institutional isomorphism and embeddedness through to the firm‐level effects of certain resource deployments. We apply an institutional approach to a case study of the Australian banking industry and supplement this with a quantitative approach based around key strategic variables. This analysis suggests that distinct groups have emerged due to the institutional environment and the different regulatory environments experienced by various banks in the industry. Copyright © 2007 John Wiley & Sons, Ltd.     

International Political Economy and Industrial Relations

The field of international political economy offers valuable insights into global economic integration, trade liberalization, global governance and the nature and activities of international organizations and regimes. Despite their impact on industrial relations, industrial relations theory has not wholeheartedly engaged with these phenomena or this sister field. This paper argues that the field of international political economy offers much to industrial relations, particularly in terms of understanding the nature and impact of internationalization and emerging global governance. The potential in a closer relationship between the two fields is illustrated by the example of the international labour standards regime and its principal organization, the International Labour Organisation.     

Short reviews

Centre for Employment Research, 1990: Ethnic Minority Businesses and Employment in Greater Manchester. Manchester: Greater Manchester Economic Development Officers Ltd, no price stated.

The National Economic Development Council, 1990: Working for Pleasure -Tourism and Leisure Tomorrow. London: NEDO, £15.00 Report, £35.00 Conference Papers.

John Freeman, Frank Gaffikin and Mike Morrissey, 1989: The Irish Economies: A Common Future? Amalgamated Transport and General Workers Union, Belfast. No price given.

Morrissey, H. 1989: Women in Ireland: The Impact of 1992. The Amalgamated Transport and General Workers Union.

Gorman. G. 1989: School-Industry Links. London: Kogan Page.

Brewster, C. and Teague, P. 1989: European Community Social Policy-Its Impact on the UK. Institute of Personnel Management, £30.00 cloth.     

A cross-country comparison of the demand for labour in Europe

A Cross-Country Comparison of the Demand for Labour in Europe.-This paper investigates structural differences in the demand for labour in France, Germany, and the UK. It finds substantial differences in the sensitivity of the demand for labour to international product demand and factor prices in all three countries. In particular, it reacts to domestic factor prices in Germany but international cost competitiveness in France and the UK; it depends upon European-wide product demand in France and Germany and a wider measure of product demand in the UK. The authors attribute these differences to product market conditions and institutional factors rather than to differences in the production technology.     

Consumption norms,trickle-down and the video/microwave syndrome

A new method is presented for investigating empirically the presence or not of consumption norms in the ownership of durables amongst different socioeconomic groups (although the method is more generally applicable to any situation in which a number of characteristics, and not just durables, may be acquired in a specific sequence). In order to illustrate the method, some results are presented for the ownership of durables as sampled by the National Readership Survey for 1985 and 1990. As a further application of the method, particular attention is paid to the changing incidence of ownership of videos and microwaves. Both theoretically and empirically, the trickle-down model of consumer choice is critically assessed and found to be wanting.