Initial conditions and privatisation as causes of post-communist corruption

This article investigates the economic determinants of corruption in post-communist countries. We conduct an empirical verification of two research hypotheses using EBRD and World Bank data on 27 post-communist economies over the 1996–2014 period. The first hypothesis suggests that corruption is rooted in the communist past, when these countries embraced communist institutions, social norms, as well as low-development structural factors broadly defined as initial conditions. The second hypothesis is that the flawed transition process led corruption to increase because politics and business were never separated. The elites pushed measures that preserved their status while obstructing reform policies that might endanger their interests. Our empirical results demonstrate that both hypotheses are valid to a limited extent, while revealing a more complex view of the reforms and initial conditions. Corruption seems to be related to the natural resource curse, to the lack of small-scale privatisation and to a long history of underdevelopment that could have preceded communism.     

The Extent of Nontariff Barriers to Industrial Countries' Imports

This article examines the extent of nontariff barriers (NTBS)to the visible imports of sixteen industrial countries. It userthree alternative measures to show that governmental commodity-specificborder measures affect more than 27 percent of all imports andmore than 34 percent of imports from developing countries. Italso shows that during the period from 1981 to 1983, NTBS becamesignificantly more extensive. Detailed statistics reveal considerablevariations in NTB coverage by commodity, type of barrier, importer,and exporter. The data on which these conclusions are basedwere compiled from official information at the highest levelof disaggregation and are described in the article.     

Cost-effectiveness of adding carfilzomib to lenalidomide and dexamethasone in relapsed multiple myeloma from a US perspective

Objective: To assess the economic value of carfilzomib (Kyprolis), this study developed the Kyprolis Global Economic Model (K-GEM), which examined from a United States (US) payer perspective the cost-effectiveness of carfilzomib-lenalidomide-dexamethasone (KRd) versus lenalidomide-dexamethasone (Rd) in relapsed multiple myeloma (RMM; 1–3 prior therapies) based on results from the phase III ASPIRE trial that directly compared these regimens.

Methods: A partitioned survival model that included three health states of progression-free (on or off treatment), post-progression, and death was developed. Using ASPIRE data, the effect of treatment regimens as administered in the trial was assessed for progression-free survival and overall survival (OS). Treatment effects were estimated with parametric regression models adjusting for baseline patient characteristics and applied over a lifetime horizon. US Surveillance, Epidemiology and End Results (1984–2014) registry data were matched to ASPIRE patients to extrapolate OS beyond the trial. Estimated survival was adjusted to account for utilities across health states. The K-GEM considered the total direct costs (pharmacy/medical) of care for patients treated with KRd and Rd.

Results: KRd was estimated to be more effective compared to Rd, providing 1.99 life year and 1.67 quality-adjusted life year (QALY) gains over the modeled horizon. KRd-treated patients incurred $179,393 in total additional costs. The incremental cost-effectiveness ratio (ICER) was $107,520 per QALY.

Limitations: Extrapolated survival functions present the greatest uncertainty in the modeled results. Utilities were derived from a combination of sources and assumed to reflect how US patients value their health state.

Conclusions: The K-GEM showed KRd is cost-effective, with an ICER of $107,520 per QALY gained against Rd for the treatment of patients with RMM (1–3 prior therapies) at a willingness-to-pay threshold of $150,000. Reimbursement of KRd for patients with RMM may represent an efficient allocation of the healthcare budget.     

Panel Data Evidence on the Effects of Fiscal Policy Shocks in the EU New Member States

We identify fiscal policy shocks in the EU new member states using four different methods. We use panel data techniques to estimate the output response to these shocks. We find that investment and export growth increase after fiscal consolidation and decelerate after fiscal stimulus when the shocks are expenditure‐based. In contrast, private consumption does not respond to fiscal policy shocks. Expenditure‐based fiscal consolidations reduce wages, supporting the view that fiscal consolidation of such composition enhances the competitiveness and profitability of domestic enterprises. In contrast, we do not find evidence of fiscal shocks affecting households' confidence.     

Characterising Japanese Direct Investment in Central and Eastern Europe: A Firm Level Investigation of Stylised Facts and Investment Characteristics

This article analyses the activities of Japanese investors in Central and Eastern Europe since the beginning of the region's transition. The use of firm level data on Japanese foreign direct investment (FDI) in the region allows us to focus on the industry, location and timing of affiliate establishment at a level of detail previously unexamined. This enables us to compare Japanese investment with overall regional inward investment as well as investigate country specialisation patterns within the region. We also characterise the type of investing parent, and determine how investments in CEE fit into the European-wide investment patterns for these firms. Finally, we investigate the entry mode choices of investing firms, finding a shift from minority-owned joint ventures and limited participation in the region in favour of wholly-owned subsidiaries and larger involvement in the region.     

Auctions with contingent payments — An overview

I survey a literature on auctions with contingent payments, that is auctions in which payments are allowed to depend on an ex-post verifiable variable, such as revenues in oil lease auctions. Based on DeMarzo et al. (2005), I describe a partial ranking of auction revenues for auctions that differ in terms of contract forms, pricing rules and seller commitment and why the revenue equivalence theorem does not apply even in an independent private values setup. I discuss models that incorporate adverse selection, moral hazard, competition between auctioneers, common values and the sale of multiple units.     

The volatility of prices in the English and Welsh electricity pool

The volatility of spot prices has been a notable feature of the English and Welsh Electricity Pool since its formation in 1990. This study investigates the possibility that the volatility of spot prices is strongly affected by the functioning of the contract market for electricity. This paper suggest that generators with market power may have an incentive to create volatility in the spot market in order to benefit from higher risk premia in the contract market. A simple theoretical model is used to illustrate this argument. Nonparametric techniques are used to test for changes in volatility after the expiry of the coal contracts in 1993 and during the price cap of 1994–1996. Strongly significant increases in volatility are found in the latter period.