Improving Mineral Taxation Policy in Australia*

Australian State governments have begun to increase royalty rates and other mineral taxes. The most instructive approach to taxation policy for the minerals sector is to set up a general model of mines which year the optimal structure of taxes. A model of mine production under uncertainty is presented. The optimal tax is a single tax with two parts. a bonus bid and conditional tax payments based on the ex-post rent of the mine. The actual structure of taxes levied by State and Commonwealth governments is seen to be distinctly sub-optimal in several respects. Proposals to move the actual to word the optimal structure are made, recognizing some of the constraints on information and the maximum acceptable rate of tax reform .     

Deliberative Democracy and Local Governance: Towards a New Agenda

Over the last decade scholars of urban governance and deliberative democracy have produced large literatures. Theorists of deliberative democracy have conceptualized the normative implications of ‘deliberation’ and explored real‐world decision‐making arrangements that approximate those ideals. Scholars of urban governance have theorized and explored the outcomes of different institutional arrangements for the governance of cities and regions. Whereas empirical democratic theory has increasingly been interested in local contexts, researchers of urban governance have been progressively more concerned about the implications of emerging patterns of urban governance for democratic accountability. However, despite the recent mutual interest among researchers in both fields, debates within these literatures frequently ignore each other and are not systematic. This introductory article reviews recent contributions that have fruitfully investigated the tension between deliberation and governance in a more systematic fashion, and concludes that our understanding of those issues is significantly improved by a research agenda that pursues an integrated approach.     

Mineral Leasing Policy: Competitive Bidding and the Resource Rent Tax Given Various Responses to Risk*

This paper considers the choice between lump-sum bidding and a tax conditional on net present value (of which the Resource Rent Tax is a practical example) as methods of collecting rent from mining projects. It demonstrates that there is an optimal combination of the two methods and that the relative emphasis to be placed on each depends heavily on the manner in which investors take risk into account. Four stylized ways in which investors and governments respond to risk are examined and, in addition to the more familiar types of risk, sovereign risk is introduced. The paper argues for the placing of relatively heavy emphasis on the conditional tax.     

Congestion Pricing and Learning in Traffic Network Games

A stochastic model describing the learning process and adaptive behavior of finitely many users in a congested traffic network with parallel links is used to prove convergence almost surely toward an efficient equilibrium for a related game. To prove this result, we assume that the social planner charges on every route the marginal cost pricing without knowing what is the efficient equilibrium. The result is a dynamic version of Pigou’s solution, where the implementation is made in a decentralized way and the information about players gathered by the social planner is minimal. Our result and setting may be extended to the general case of negative externalities.