Public goods provision: Unit-by-unit cost-sharing rules and the core

In a simple model of one public good producible from one input, we show that unit-by-unit cost-sharing rules have two properties. First, a unit-by-unit cost-sharing rulealways chooses a core allocation. Second, every allocation in the core will be chosen by at least one unit-by-unit cost-shring rule. We argue that costs should be shared on a unit-by-unit basis. We propose a simple mechanism to implement the family of unit-by-unit rules. Received: 18 May 2005, Accepted: 6 December 2005 JEL Classification: H41, C72, D78 I thank Hervé Moulin for helpful comments and discussions. All errors are mine. Financial support from the Hong Kong Research Grants Council under grant RGC-DAG99/00.BM52 is gratefully acknowledged.     

On the public provision of the performing arts

In this paper, we present a model in which the performing arts are modelled as congestible public goods. In accordance with empirical evidence, the production of seat capacity is assumed to be subject to fixed costs. We estimate the parameters of the model's demand and cost functions using German data. Using these estimates in a subsequent social choice analysis, we show that the current situation in the German performing arts sector is best described by a directorship that under the influence of a selfish theater lobby maximizes only the welfare of the spectators. Such an equilibrium, characterized by too low ticket prices and too large capacity, is most likely to establish if citizens have a very positive ex ante notion of the performing arts.     

Government size,composition of public spending and economic growth in Brazil

The performance of the fiscal policy is largely affected by the relationship between government size, composition of public spending and economic growth. We use a theoretical framework to find optimal relations among these variables and confront them with a panel data for the Brazilian states. Private capital and government spending are substitute inputs in production as the Brazilian states require provision of public spending to fill gaps in the underdeveloped private sector. Public investment and current government expenditures are combined in fixed ratios in the overall government spending due to strong rigidity of the public budget. The optimal share of public investment is considerably lower than current expenditures, as occurs in developing countries characterized by low economic dynamism. Finally, the average tax burden from the data is below the estimated optimal level, meaning that there is space for increasing tax rate without harming economic growth for some Brazilian states.     

Religion,administration & public goods: Experimental evidence from Russia

In this paper, I argue that religion matters for the provision of public goods. I identify three normative foundations of Eastern Orthodox monasticism with strong economic implications: 1. solidarity, 2. obedience, and 3. universal discipline. I propose a public goods game with a three-tier hierarchy, where these norms are modeled as treatments. Obedience and universal discipline facilitate the provision of threshold public goods in equilibrium, whereas solidarity does not. Empirical evidence is drawn from public goods experiments run with regional bureaucrats in Tomsk and Novosibirsk, Russia. The introduction of the same three norms as experimental treatments produces different results. I find that only universal discipline leads to the provision of threshold public goods, whereas solidarity and obedience do not. Unlike in Protestant societies, in Eastern Orthodox societies free-riding occurs at lower than at higher hierarchical levels. Successful economic reforms in Eastern Orthodox countries start with the restructuring of the middle- and lower-ranked public sector. Authoritarian persistence is defined by the commitment of the dictator to overprovide public goods.     

Boom, bust, and the poor: Poverty dynamics in the Middle East and North Africa, 1970–1999

This paper analyzes changes in poverty and inequality in the Middle East and North Africa. It finds that the structural relationship between poverty reduction, income growth and distribution is the same for MENA and other developing economies. Prior to 1985 rapid growth sharply reduced poverty. After 1985, despite very low income growth, a rising share of income accruing to the lowest quintile meant that the average income of the poor rose more rapidly than that of the non-poor. These unusual poverty dynamics were primarily due to international migration. Remittances both increased per capita incomes in labor exporting countries and increased the share of income accruing to the poor.     

WHAT DO CITIZENS THINK ABOUT PUBLIC ENTERPRISES? SUBJECTIVE SURVEY DATA ON THE LEGITIMACY OF THE ECONOMIC ACTIVITIES OF THE GERMAN PUBLIC SECTOR

We analyse the legitimacy of public enterprises that perform economic activities by focusing on the citizens’ subjective preferences, i.e. determining their political legitimacy. Using data from a representative survey conducted among 318 citizens of the German state of Rhineland‐Palatine, we explore determinants for the support of either privatisation efforts or the instrumental thesis, a widespread principle in German‐speaking countries, which considers public enterprises solely as instruments to fulfil economic policy objectives. Our results indicate that the respondents’ perception of the efficiency of public enterprises as well as their personal economic situation are important factors for the support of privatisation. The influential factors for the use of public enterprises as policy instruments are political ideology, the perception of a higher security of supplying goods and services as well as opinions regarding corporate social responsibility. The subjective preferences of a (democratic) country's citizens are thus an important reason why the public sector should or should not play an active part in providing goods and services. This can play an important role when decision makers from the public sector are keen to take into account the citizens’ approval or disapproval of privatisation measures.     

城市发展质量评价的公众参与研究

城市发展质量评价是现代城市治理的有效手段之一。公众参与城市发展质量评价不仅是民主政治的集中体现,也有助于提高评价的质量和信度。本文在分析城市发展质量与公众之间辩证关系的基础上,讨论了公众在城市发展质量评价中的主体作用,分析了评价过程各阶段的公众参与形式,并初步研究了公众参与的主要问题及对策。     

Which Firms are More Sensitive to Public Disclosure Schemes for Pollution Control? Evidence from Indonesia’s PROPER Program

This paper analyzes differences in firms’ responsiveness to PROPER, Indonesia’s public disclosure program for industrial pollution control. The overall effectiveness of this program at achieving emissions reductions and its low regulatory costs have earned it a good reputation around the world. PROPER had no deterrents or incentives other than those that arose indirectly from publicly disclosing information about the environmental performances of firms. We analyzed plant-level data to relate short- and longer-term environmental responses to facility characteristics. The results revealed that foreign-owned firms were consistently more likely to respond to the environmental rating scheme, compared to private domestic firms. This is a clear and important insight with consequences for a number of issues, such as understanding the pollution haven debate. Also, firms located in densely populated regions, particularly in Java, responded more positively to the public disclosure of PROPER ratings. The main observed effect was however given by the initial level of environmental performance of firms. Those firms that had bad environmental performance records felt pressure to improve, but if the initial abatement steps had already been taken, the incentives to improve further appeared to diminish.     

Government Expenditures and Revenues: Evidence of Fractional Cointegration in an Asymmetric Modeling

In this paper, we examine the relationship between the US government expenditures and revenues using a fractional cointegration framework. In doing so, we permit a much richer degree of flexibility in the dynamic adjustment process toward equilibrium than in the classical case of cointegration. Moreover, we relax the assumption of a symmetric adjustment process throughout the use of threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR) models in the error correction representation of the process. The results show that both individual series are non-stationary I(1) and we do not find evidence of cointegration of any degree. However, if we take into account a structural break at 1973(2), fractional cointegration is found if the underlying process is autocorrelated, especially in the asymmetric modeling.

Welfare Policy and Precarious Lives: “Welfare Reform” Revisited

Abstract:

Although welfare reform has not been one of the most highly visible policy agendas for the Trump administration, restricting access to public assistance programs has been a part of proposals and actions in a number of areas. The Trump administration’s overall approach to welfare reform was articulated formally in 2018 in an Executive Order and a Council of Economic Advisers Report. To provide some context for a discussion of these two documents, the article begins with a discussion of the different meanings of “welfare reform” identified in institutionalist literature, and a brief overview of some important findings on the impacts of the 1996 welfare reform. It then highlights some key aspects of the Trump administration’s approach to welfare reform and responses from the poverty research and advocacy community.