Air passenger duties as strategic tourism taxation

There has been a recent debate on the rationale and economic impacts of air passenger duties (APDs) linked to puzzling empirical results on this topic. We argue that an approach from strategic tourism taxation can improve our understanding of these results. APD set by origin countries of tourists can be viewed as an instrument for extracting economic rents that would otherwise be retained by tourism destinations. A theoretical model of strategic taxation between an origin and two destinations is developed to illustrate this idea. We find that countries' strategies may end up with winners and losers, or with all parties facing welfare losses. The game outcome depends on countries' market shares of profits and the substitutability between tourism services provided by different destinations. The findings suggest that the economic impacts of APDs recently evaluated in the literature might be biased because of the omission of other countries' potential tax reactions.     

保障性住房“退出难”的破解之道——以杭州市廉租住房为样本

保障性住房是市场经济条件下政府为了解决市场失灵而提供的一种公共产品。作为投入有限资金的政府公共资源,现实中保障性住房"退出难"的情况时有发生,若不加以重视解决,则容易导致保障性住房供给结构失衡,加剧供需矛盾,造成有限的住房资源难以发挥最大的保障作用。本文以租赁型保障性住房中的廉租住房为分析样本,解读当前廉租住房的制度架构,并分析了廉租住房退出管理中的现实困难及背景原因。在此基础上,提出从制度建设、工作机制、配套措施等方面多管齐下破解"退出难"问题,以期为保障性住房退出管理提供多维的解决思路。     

Cooperation by way of support in a rent seeking contest for a public good

This paper analyzes the efforts made to influence a decision that can have two outcomes. First, the agents on the same side designate an agent to play the contest for them. The inactive agents can then decide to support this active agent, i.e. pay a percentage of his effort. It is optimal to designate either the agent with the lowest stake (who will receive support from everyone else) or the agent with the highest stake (who will not receive support) as the active agent. We find that the side with the higher aggregate stake may have the lower success probability.     

On the desirability of an efficiency defense in merger control

We develop a model in which two firms that have proposed to merge are privately informed about merger-specific efficiencies. This enables the firms to influence the merger control procedure by strategically revealing their information to an antitrust authority. Although the information improves upon the quality of the authority's decision, the influence activities may be detrimental to welfare if information processing/gathering is excessively costly. Whether this is the case depends on the merger control institution and, in particular, whether it involves an efficiency defense. We derive the optimal institution and provide conditions under which an efficiency defense is desirable. We also discuss the implications for antitrust policy and outline a three-step procedure that takes the influence activities into consideration.     

Rent seeking and aid effectiveness

We introduce foreign aid and a rent seeking contest for public funds into the Barro (JPE 1990) growth model. We find that aid effectiveness depends on fiscal policies, the level of aid inflows and the quality of institutions that restrict appropriation of public funds by rent seeking agents. These results can be shown to be consistent with the best established findings in the empirical literature on aid effectiveness. Rent seeking may thus indeed be a major determinant of aid effectiveness. We further discuss how aid effectiveness depends on the way foreign aid is disbursed and on the determinants of institutional quality. JEL Classification F35 · D72 · D9 · H2     

The political economy of the G20 agenda on financial regulation

The paper empirically examines the implementation record of international financial regulation of the banking sector. The study finds that the size of the banking sector and the presence of global systemically important banks (G-SIBs) are positively associated with a stronger implementation record. These results suggest that cooperative motives of internalising externalities, creating a level playing field and preserving financial stability play a role in explaining the implementation record. We find evidence that this cooperative behaviour may be driven by the self-interest of global players as the positive record is particularly strong in countries where large banking sectors and big banks are both present, and where regulation only applies to large players. Sectoral concentration, bank health and the share of foreign ownership yield more mixed results as regards their impact on implementation.     

Landlords, tenants and the public sector in a spatial equilibrium model of rent control

A spatial model is used to explore the effects of urban rent control. When landlords and tenants can alter economic and location decisions, policy effects in controlled and uncontrolled zones may differ from standard predictions. Tenants in both zones may benefit from the control, even after unfavorable landlord adjustments, but these gains are likely to come at the expense of landlords and the public sector. Efforts to restore profits and fiscal balance, without negating utility gains to renters, may fail unless control distortions can be adequately shifted to absentee landowners through lower site rents. Lump-sum renter subsidies may offer equivalent utility gains with less severe impacts on landlords and the public sector, but the supply elasticity of land again matters.     

AGRARIAN LAND TENANCY IN PREWAR JAPAN: CONTRACT CHOICE AND IMPLICATIONS ON PRODUCTIVITY

We study the tenancy contract choice and its impact on productivity in the prewar Japanese agriculture, where a unique contractual form, the rent-reduction contract, was predominant. Theoretically, this contract is more efficient than share tenancy or fixed-rent contract in terms of provision of incentives and risk-sharing, and thus raises the question of why such an efficient contract was uncommon outside Japan. We argue that transaction costs on the execution of rent reduction were the key element in the adoption of this contract. In prewar Japan, local communities played some role in governing the process of rent reduction and mitigated such costs. Thus the study proposes transaction costs and institutions as additional determinant of tenancy contract choice. We also find that higher prevalence of tenancy was associated with lower average rice yield at the prefectural level and such correlation was stronger in prefectures with a greater proportion of share tenancy.     

Efficiency and competition in the long run: The survival of the unfit

In a dynamic contest the current incumbent competes against a randomly assigned entrant in a private value all pay auction each period. We focus on equilibria where the beliefs about the incumbent's type and the employed strategies are stationary. We show that inefficient types survive, even if the entrants arrive very frequently, because the entrant plays more aggressively than the incumbent, allowing a low type entrant to win against a high type incumbent. In an example we show that if the incumbent is challenged more often, then the equilibrium type of the incumbent is higher on average. When the value of the prize is the same for all players (the case studied in the public choice literature), the equilibrium rent of the bidders is fully dissipated as the incumbent is challenged infinitely often. The technical contribution lies in showing the existence of stationary equilibrium in an incomplete information game.