Implementation of International Environmental Commitments in Countries in Transition

MOCT-MOST: Economic Policy in Transitional Economies -     

Productivity Growth and Organizational Learning

A new specification of the sources of productivity growth is offered. Motivated by the lack of innovation and technology adoption in backward economies, a third channel of growth related to organizational structure, work ethics, and discipline in the production process (for simplicity called organizational learning) is suggested. The suggested specification generates new insights about the dominating source of growth during the development process: organizational learning in backward economies, technology adoption in middle‐income economies, and innovation in developed economies. This adds to the current understanding of development as a transition from technology adoption to innovation. Numerical simulations of the Thai catch‐up process since 1965 illustrate the importance of organizational learning. A counterfactual experiment shows how investments in secondary education contribute to the move from organizational learning to adoption of more advanced foreign technology.     

Multinational supermarket chains in developing countries: does local agriculture benefit?

There is no consensus in the empirical literature on how entry of multinational supermarket chains affects farmers in developing countries. Econometric analyses struggle with causality issues and are unclear about the channel of effects. We quantify the dynamic effects of supermarket expansion on agriculture within a structural framework that clarifies the adjustment mechanisms involved. The model specification allows for endogenous interaction between agricultural productivity and supermarkets' choice of suppliers. Based on numerical simulations, two results emerge. First, we offer a possible interpretation of the conflicting evidence in the empirical literature. Whether farmers benefit from supermarkets or get stuck in a low productivity trap depends on the extent of local constraints related to production capacity and market access. Second, supply chain development initiated by supermarkets can help farmers escape the low productivity trap. While supermarkets face a short-run cost to supplier upgrading, they gradually gain from more productive local suppliers.     

Regional payroll tax cuts and individual wages: heterogeneous effects of worker ability and firm productivity

International Tax and Public Finance - This paper exploits a payroll tax reform in Norway and applies matched employer–employee register data on individual wages to study the incidence of...     

Trade,Skill Biased Technical Change and Wage Inequality in South Africa

Trade openness influences the wage structure via technology adoption in middle income countries. Given the econometric challenges of handling endogenous trade and technology interaction, we offer an alternative quantification based on calibration of a general equilibrium model. We expand the standard open economy Ramsey model to include comparative advantage, technology adoption and skill bias influenced by investment decisions. The calibration constructs a reference path for South Africa and allows counterfactual analysis of trade openness. The quantitative results imply that trade effects via technology adoption and skill bias can be an important determinant of wage inequality in middle income countries.     

National income taxation and the geographic distribution of population

We study how different national taxation schemes interact with geographic variation in productivity and consumption amenities in determining regional populations. A neoclassical migration equilibrium model is used to analyze the current nominal income tax system in Norway. The analysis is based on estimated regional income differences accounting for both observable and unobservable individual characteristics and the value of experience. Given regional differences in incomes and housing prices, quality of life and productivity are calibrated to model equilibrium. Compared to an undistorted equilibrium with lump-sum taxation, nominal income taxation creates a disincentive to locate in productive high-income regions. The deadweight loss due to locational inefficiencies is 0.18% of gross domestic product (GDP). We study real income taxation and equal real taxes as alternative tax systems. Both alternatives generate a geographic distribution of the population closer to the undistorted equilibrium, and hence with lower deadweight loss. In an extension of the analysis, we take into account payroll taxes. The existing regionally differentiated payroll taxes to the disadvantage of cities generate a deadweight loss of 0.22% of GDP in an economy with lump-sum income taxation. The two distortionary taxes interact and strengthen each other and the combined distortionary effect of income and payroll taxation in the Norwegian system is 0.46% of GDP.