Unemployment insurance: Risk sharing versus efficiency

Two models of spot labor markets are presented in which labor suppliers have heterogeneous attitudes towards effort and in which uncertainty prevails on labor productivity and growth. The problem of selecting efficient rules to manage unemployment insurance (UI) systems is considered. We show that there does not exist any system which combines an efficient allocation of labor with an efficient allocation of risks among employees, unemployed workers and capital-owners. Pareto-efficient policy rules are a best compromise between these two conflicting objectives. It implies that productive efficiency could be improved in periods of mass unemployment by reducing UI benefits. That would be at the expense of more inefficiencies in the sharing of macroeconomic risks. At the optimum, the UI benefit is positively correlated to growth and it is negatively correlated to labor productivity.     

韩国电信(KT)移动WiMAX(WiBro)服务介绍

移动WiMAX与WiBro之间的关系WiBro源自韩国。早在2004年7月韩国信息通讯部(MIC)正式公布移动WiMAX(WiBro)的服务要求之前,韩国电信技术协会(TTA)内部就开展了一项本地     

Illusory revenues: Import tariffs in resource-rich and aid-rich economies

Where imports are financed predominantly by rents from resource extraction or aid the revenue generated by tariffs is illusory. Revenue earned by the tariff is offset by a reduction in the real value of aid and resource rents. Revenue is however moved between accounts in the government budget which, in the case of aid, may reduce the burden of donor conditionality. We demonstrate this proposition for a simple central case and show that the result is not overturned by generalisations around this case. We argue that trade policy formulation in such economies should recognize the illusory nature of tariff revenues.     

"带形容词"的民主:比较研究中的概念创新

近年来,世界各国民主化的趋势使得学者们必须面对两个具有潜在矛盾的目标:其一是建立一个能涵盖各个国家不同经验、具有多样性的民主概念;其二是在不扩大概念的基础上扩大对这一大类案例的分析。本文认为这种双重挑战导致了概念创新的加速,产生了几百种民主的亚类型———也就是“带形容词”的民主。本文对出现的三种重要创新类型的优势和弱点进行了探讨,这三种类型是:对民主定义的“精确化”;对与民主相关联的大概念进行转化;以及建立不同的亚类型。鉴于这些重新定义民主概念的策略所产生的含义具有复杂的结构,我们显得老生常谈式的结论其实具有新的紧迫含义:学者们必须通过对他们所使用的民主概念进行清楚的定义和说明来为自己的研究定位。     

Investment in Africa's Manufacturing Sector: A Four Country Panel Data Analysis

Firm level data for the manufacturing sector in Africa, presented in this paper, shows very low levels of investment. The importance of profit effects on investment is investigated using a flexible accelerator, a specification based on the Euler equation and a simple generalisation of these specificiations. There are controls for firm fixed effects. It is shown that the profit effect is very similar for both the accelerator and Euler equation specifications. A comparison with other studies shows that, for small firms, the effect is much smaller in Africa than for other countries. Reasons for the relative insensitivity of investment to profits in African firms are suggested. For the most general specification tested there are no significant differences in the size of the profit effect across the four countries in the study.     

Ethnicity, Politics and Economic Performance

The paper investigates the effects of ethnic diversity on economic performance. Previous studies have found that diversity has various detrimental microeconomic effects, tending to reduce public sector performance, and has large detrimental effects on the overall growth rate. I develop a simple model of the effect of ethnic diversity on a government decision problem in which there is a tradeoff between growth and distribution, in the contexts of democracy and dictatorship. I find that in democracy ethnic diversity has no effect upon the decision, whereas in dictatorship ethnic diversity leads to a government choice which reduces the growth rate. I then test these propositions on two data sets. The first is for 94 countries over the period 1960–1990. I find that whether diversity adversely affects overall economic growth depends upon the political environment. Diversity is highly damaging to growth in the context of limited political rights, but is not damaging in democracies. The second is for World Bank projects in 89 countries. I find that the same relationship between diversity and democracy affects the proportion of projects which are successful.     

Implications of ethnic diversity

Ethnically differentiated societies are often regarded as dysfunctional, with poor economic performance and a high risk of violent civil conflict. I argue that this is not well founded. I distinguish between 'dominance', in which one group constitutes a majority, and 'fractionalization', in which there are many small groups. In terms of overall economic performance, I show that both theoretically and empirically, fractionalization is normally unproblematic in democracies, although it can be damaging in dictatorships. Fractionalized societies have worse public sector performance, but this is offset by better private sector performance. Societies characterized by dominance are in principle likely to have worse economic performance, but empirically the effect is weak. In terms of the risk of civil war, I show that both theoretically and empirically fractionalization actually makes societies safer, while dominance increases the risk of conflict. A policy implication is that fractionalized societies are viable and secession should be discouraged.
—Paul Collier     

Fiscal Response to a Temporary Trade Shock: The Aftermath of the Kenyan Coffee Boom

The appropriate fiscal response to a temporary terms of tradewindfall is difficult to determine, even in an unregulated economy.But controls, such as those in force during the 1976–79coffee boom in Kenya, introduce special problems. For example,foreign exchange controls make the private investment of boomincome inefficient by causing it to be undertaken too rapidly.In Kenya the boom induced a massive increase in public expenditure,far in excess of the increase in public revenue. The net effecton capital formation was negative because the fiscal responseexacerbated the rise in the relative price of nontraded capitalgoods, and because resources were preempted for government consumption.     

Credit Constraints in Manufacturing Enterprises in Africa

We investigate the question of whether firms in Africa's manufacturingsector are credit constrained. The fact that few firms obtaincredit is not sufficient to prove constraints, since certainfirms may not have a demand for credit while others may be refusedcredit as part of profit maximising behaviour by banks. To investigatethis question, we use direct evidence on whether firms had ademand of credit and whether their demand was satisfied in theformal credit market, based on panel data on firms in the manufacturingsector from six African countries. Of those firms with a demandfor credit, only a quarter obtained a formal sector loan. Ouranalysis suggests that while banks allocate credit on the basisof expected profits, micro or small firms are much less likelyto get a loan than large firms. We also find that outstandingdebt is positively related with obtaining further lending. Therole of outstanding debt is likely to be a reflection of inefficiencyin credit markets, while the fact that size matters is consistentwith a bias as well, although we cannot totally exclude thatthey reflect transactions costs on the part of banks. We presentan analysis showing how much more profitable small firms mustbe to obtain a loan than large firms.     

Military expenditure in post-conflict societies

Post-conflict situations face a high risk of reversion to conflict. We investigate the effect of military expenditure by the government during the first decade post-conflict on the risk of reversion. We contrast two theories as to the likely effects. In one, military spending deters conflict by reducing the prospects of rebel success. In the other it acts as a signal to the rebels of government intentions. In the signalling model, low military spending signals that the government intends to adhere to the terms of the peace settlement and so reduces the risk of renewed rebellion. We investigate the effects of post-conflict military spending on the risk of conflict, using our existing models of military expenditure and of conflict risk. We find that, consistent with the signalling model, high military spending post-conflict significantly increases the risk of renewed conflict. This effect of military spending is distinctive to post-conflict period, and becomes progressively more pronounced over the decade. Received: April 2004, Accepted: December 2004, JEL Classification: H56, F35, O10