Perceived quality of public services, liquidity constraints, and the demand of private specialist care

In this article we offer direct evidence on the role of perceived quality differences in publicly provided health care services, in determining the incentive to opt out for private services and, for poor individuals, short-run credit constraints in the access to these services. We concentrate on private specialist care, a category of services for which disparities in the access are highest. We use Bank of Italy—SHIW data to first study the determinants of demand for private and public specialist care, estimating probit and bivariate probit models, and ZIP models. We then apply the Carneiro–Heckman procedure to identify the share of people constrained and study how perceived quality of public services affects the percentage of people short run constrained. Our estimates suggest the presence of large territorial differences, as for the role of income and the quality of public services.     

Market size and tax competition

With international externalities, different country sizes, imperfect competition, and trade costs, tax competition for mobile firms is efficiency-enhancing with respect to the free market outcome. Under both scenarios, the resulting inefficiencies in international specialization and trade flows vanish when trade costs are low enough. Otherwise, only international tax coordination can implement the efficient spatial distribution of firms.     

The evolution of cognitive radio technology in Europe: Regulatory and standardization aspects

Cognitive radio (CR) is considered a promising technology that could provide important benefits in the telecommunication domain. In Europe, the number of research projects, standardization activities and public consultations by the European Commission and regulatory authorities testify to the growing interest in CR. The introduction of CR in the telecommunication market may require new regulations or changes to the way spectrum is licensed and the conditions under which it can be used. The concepts of CR can be applied to various operational scenarios, which are described in this paper.This paper identifies the main challenges for the deployment of CR technology in Europe, provides an overview of the activities by European regulatory and standardization bodies to address the identified challenges and describes a roadmap with potential actions to support the adoption of CR technology.     

Firm Heterogeneity,Contract Enforcement,and the Industry Dynamics of Offshoring*

We develop an endogenous growth model with R&D spillovers to study the long‐run consequences of offshoring with firm heterogeneity and incomplete contracts. In so doing, we model offshoring as the geographical fragmentation of a firm's production chain between a home upstream division and a foreign downstream division. While there is always a positive correlation between upstream bargaining weight and offshoring activities, there is an inverted U‐shaped relationship between these and growth. Whether offshoring with incomplete contracts also increases consumption depends on firm heterogeneity. As for welfare, whereas with complete contracts an R&D subsidy is enough to solve the inefficiency due to R&D spillovers, with incomplete contracts a production subsidy is also needed.     

Offshoring and product innovation

We propose an endogenous growth model with offshoring to investigate its effects on product innovation and growth in the country of origin. Offshoring is associated with reduced feedback from offshored plants to domestic labs as well as coordination problems between the offshored and domestic divisions of firms. Production and transport cost parameters affect the static decision to relocate plants but not R&D. Hence, offshoring may be chosen by firms when it damages the growth rate of their countries of origin. In particular, if offshoring reduces the feedback from plants to labs, it is likely to bring dynamic losses when the countries of origin are large, especially in sectors in which R&D is cheap and product differentiation is strong. It is also likely to slow growth in sectors in which contractual incompleteness gives a strong bargaining power to offshored divisions in intra-firm transactions. We thank Thierry Verdier, an anonymous referee and participants to the Final Conference of the EU funded Research Training Network “Trade, Industrialisation and Development”, held at Paris Jourdan Sciences Economiques on 26–27 October 2006, for helpful comments. The second author gratefully acknowledges financial support from MIUR.     

Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs

This article formalizesthe theoretical interconnections among four post–industrialrevolution phenomena—the industrialization and growth take-offof rich northern nations, massive global income divergence, andrapid trade expansion. In stages-of-growth model, the four phenomenaare jointly endogenous and are triggered by falling trade costs.In the first growth stage (with high trade costs) industry isdispersed internationally, and growth is low. In the second (mediumtrade costs), the North industrializes rapidly, growth take-off,and the South diverges. In the third (low trade costs), highgrowth and global divergence become self-sustaining. In the fourthstage, when the cases of ``trading' ideas decreases, the Southquickly industrializes and converges.     

Targeting welfare in Italy: old problems and perspectives on reform

This paper has two principal objectives. Using a tax‐benefit microsimulation model and the 1998 micro data of the Bank of Italy survey of household income and wealth, we first study the distributional effects of the current Italian income maintenance system and highlight its main defects and limitations, concerning in particular its unequal coverage of the population and its low efficiency in fighting poverty. The second aim is to describe and analyse the reforms recently implemented in this field; in particular, the Italian government has reformed the targeting criteria and introduced three new cash transfers. We describe these reforms both in their institutional characteristics and in their likely distributional consequences, and examine whether and to what extent they are able to overcome the shortcomings of the current system.     

Special Interests and Technological Change

We study an OLG economy where productivity growth comes from two alternative sources: process innovation and learning-by-doing. There is a trade-off between the two in so far as frequent technological updates reduce the scope for learning on existing technologies. A conflict is shown to arise between the young and the old, because the former favour innovation while the latter prefer learning. We model the interaction between overlapping generations and policy makers as a dynamic common agency problem, where competing generations invest a certain amount of resources to lobby either for the maintenance of the current technology or the adoption of a new one. By focusing on truthful Markov perfect equilibria, we characterize the political equilibrium and show its dependence on the underlying demographic, technological and preference parameters.     

Countries, regions and trade: On the welfare impacts of economic integration

We study the impact of falling international trade costs and falling national transport costs on the economic geography of countries involved in an integration process. Each country is formed by two regions between which labor is mobile, whereas there is no international mobility. Goods can be traded both nationally and internationally at positive, but different, costs. A decrease in trade costs and/or in transport costs has a direct impact on prices and wages, which allows us to account for the impact of changes in these parameters on the economic geography and welfare of each country. We show that, as trade barriers fall, the benefits of integration come after its costs. We also show that national transport policies are of the beggar-thy-neighbor type. On both counts, policy coordination is required in the process of economic integration.