Environmental policy incentives to adopt advanced abatement technology:: Will the true ranking please stand up?

We investigate incentives through environmental policy instruments to adopt advanced abatement technology. First, we study the case where the regulator makes long-term commitments to policy levels and does not anticipate arrival of new technology. We show that taxes provide stronger incentives than permits, auctioned and free permits offer identical incentives, and standards may give stronger incentives than permits. Second, we investigate scenarios where the regulator anticipates new technologies. We show that with taxes and permits the regulator can induce first-best outcomes if he moves after firms have invested, whereas this does not always hold if he moves first.     

Asset allocation and location over the life cycle with investment-linked survival-contingent payouts

This paper shows how survival-contingent investment-linked payouts can enhance investor wellbeing in the context of a portfolio choice model which integrates uninsurable labor income and asymmetric mortality expectations. In exchange for illiquidity, these products provide the consumer with access to mutual-fund style portfolio choice, as well as the survival credit generated from pooling mortality risk. Our model generates optimal asset location patterns indicating how much to hold in liquid versus illiquid survival-contingent payouts over the lifetime, and also asset allocation paths, showing how to invest in stocks versus bonds. We show that the investor who moves her money out of liquid saving into survival-contingent assets gradually from middle age to retirement and beyond, will enhance her welfare by as much as 50%. The results are robust to the introduction of uninsurable consumption shocks in housing expenses, income flows during the worklife and retirement, sudden changes in health status, and medical expenses.     

To Trust or to Control: Informal Value Transfer Systems and Computational Analysis in Institutional Economics

This article illustrates the usefulness of computational methods for the investigation of institutions. As an example, we use a computational agent-based model to study the role of general trust and social control in informal value transfer systems (IVTS). We find that the terms of interaction between general trust and social control have an impact on how IVTS work, become stable, and prove highly effective. The case shows how computational models may help (i) to operationalize institutional theory and to clarify the functioning of institutions; (ii) to test the logical consistency of alternative hypotheses about institutions; and (iii) to relate institutionalist theory with other paradigms and to practice an interested pluralism.     

The Possibility of Industrial Policy

In this paper I shall outline and analyse the case for employing industrial policy in the pursuit of economic development, in the particular context of Sanjaya Lall's contributions in this area. The case for industrial policy rests on both a positive vision (the nature of technological knowledge and technological capabilities) and a normative vision (government capacity and the promotion of competitiveness). The case for industrial policy depends on establishing both its necessity and its possibility. Necessity is defined in terms of the nature of knowledge and technology, and its implications in terms of market failure; possibility is defined in the context of political economy, and in terms of the costs of discretionary policy interventions. The broader debate on industrial policy is framed in terms of these two dimensions. In particular, the possibility of a welfare-enhancing industrial policy is circumscribed by the ability to control the potential costs of discretionary government intervention. This ability is in turn a function of the political process and of “social capital”, a late concern of Lall's.     

Theorizing self‐repairers' worldview–personhood to advance new thinking on extended product lifetimes

The ecological and societal problems caused by product obsolescence and consumerism in modern economies constitute a “wicked human‐made problem” of significant magnitude. Current (old) ways of thinking cannot address these problems. Accordingly, in this paper, we critically explore the novel idea of integrated personhood and worldviews to theorize research on self‐repairers and their repair behaviours to extend product lifetimes. We conducted a structured and systematic review of published work (n = 183) to identify the conceptual content of the field to inform our theorization. Our findings highlight three key issues. First, constricted theorization undermines understanding of self‐repairers and their product lifetime extension (and spillover) behaviours. Second, the underlying conceptual complexity is typically underestimated. Third, the dominance of voluntarist and deterministic studies impedes new directions in research. From our review, an integrated worldview–personhood framework emerges that can deepen understanding of avant‐garde self‐repairers’ engagement with product lifetimes.     

From ability to pay to concepts of equal sacrifice

The ability-to-pay approach to taxation in Mill's tradition is given a rigorous treatment in a social choice theoretic framework. Generalized concepts of equal sacrifice are axiomatized making explicit use of the ability-to-pay principle. Extensive statements on progressivity are derived. However, there is no such axiomatized concept that implies non-excessive progressitivity irrespective of taxpayers' utility function.