Anticorruption reforms,tax evasion,and the role of harassment

We examine the impact of anticorruption reforms on tax evasion when corruption and potentially harassment are endemic among tax auditors. We find that the threat of harassment may counterintuitively boost the impact of such anticorruption reforms on tax evasion and also eliminate corruption. Specifically, a moderate anticorruption policy can discontinuously reduce tax evasion to a level even below that under no corruption. Further strengthening of such policy can nonetheless prove counterproductive and increase tax evasion. On the contrary, in the absence of harassment, a moderate anticorruption reform induces higher tax evasion and sustenance of bribery. In this case, only a large reform can reduce tax evasion and eliminate corruption.     

Optimal trade policy with quality-differentiated goods

In this article we apply the model of vertically differentiated products to international trade. A foreign firm competes with a domestic firm in the latter's market, producing products of varying quality. We examine the nature of the equilibrium in this case, assuming the firms compete in prices. Contrary to the popular belief, we show that a protectionist policy of imposing a tariff on the foreign firm raises overall welfare in the domestic economy, as well as induces the domestic firm to upgrade the quality of its product, if it produces the lower quality product. Furthermore, if minimum quality standards are imposed on the foreign firm, the domestic firm upgrades quality, and overall welfare in the domestic economy is higher.     

The Nature of Corruption Deterrence in a Competitive Media Sector

This paper compares the deterrence provided by a competitive media sector towards government induced corruption with that of a media monopoly in a setting where the media might raise both true as well as false allegations of corruption. It finds that competition’s impact on corruption deterrence is not necessarily better than a monopoly but rather hinges on a delicate balance between government’s kickback from corruption and the media’s potential benefit from exposure. While the paper does identify conditions in which a competitive media sector would improve upon the deterrence provided by a monopoly, it also find conditions under which it would do no better than a monopoly and in some situations its strategic response could be even worse especially when it intensifies effort towards justifying false allegations.     

Persuasion as a contest

We examine how the probability of persuading an audience depends on resources expended by contending parties as well as on other factors. We use a Bayesian approach whereby the audience makes inferences solely based on the evidence produced by the contestants. We find conditions that yield the well-known additive contest success function, including the logit function. We also find conditions that produce a generalized ??difference?? functional form. In all cases, there are three main determinants of audience choice: (i) the truth and other objective parameters of the environment; (ii) the biases of the audience, and (iii) the resources expended by the interested parties.     

Collateralized Lending by Indian Banks: Some Explanations and Policy Implications

This paper draws a parallel between the extent of unsecured lending that a bank does and the screening effort extended by the bank. Since unsecured lending requires screening on the part of the bank, higher the percentage of unsecured loans in total loans, higher is likely to be the screening effort while processing loan applications. Using panel data relating to banks in India, we find that on an average a higher extent of screening effort or unsecured loans is likely to be provided by banks that are large, have low level of non-performing assets, and are in the private sector. Further, persistence in the extent of unsecured lending seems to suggest that any change in unsecured lending/ screening effort is likely to be rather slow.

     

INFLUENCING THE PUBLIC AND EFFICIENCY IN BUREAUCRATIC PROVISION

Abstract.  In the present paper a public bureau can extract additional budgetary allocations, not only by misreporting its production cost to its oversight committee but also by 'influencing' the perceptions of the public at large. I juxtapose the bureau's ability to influence the public with its ability to misreport to the oversight committee, and find that influencing the public might support an efficient level of production by invoking a separating equilibrium. However, a pooling equilibrium involving either overproduction or underproduction of output cannot be ruled out. Accordingly, overproduction could occur even when the bureau cares only about extracting excess budget and not increasing output per se.     

Inter-corporate loans: the Indian experience

We examine transactions of inter-corporate loans among Indian non-financial firms during 1999–2014. We find that the consolidated amount of these loans is not small and comparable to total short-term bank loans transacted in a year. Over the years, a number of such loan providers/receivers has increased. Both group and stand-alone firms across different industries receive and provide inter-corporate loans and these transactions are not one-off events. Larger and older firms grant these loans to smaller and younger firms. Loan receivers report higher leverage, accounts payable and lower cash balance than non-receivers and about thirty percent of loan receivers are financially distressed.     

Comorbidity and economic burden among moderate-to-severe psoriasis and/or psoriatic arthritis patients in the US Department of Defense population

Aims: To examine the comorbidity and economic burden among moderate-to-severe psoriasis (PsO) and/or psoriatic arthritis (PsA) patients in the US Department of Defense (DoD) population.

Materials and methods: This retrospective cohort claims analysis was conducted using DoD data from November 2010 to October 2015. Adult patients with ≥2 diagnoses of PsO and/or PsA (cases) were identified, and the first diagnosis date from November 2011 to October 2014 was defined as the index date. Patients were considered moderate-to-severe if they had ≥1 non-topical systemic therapy or phototherapy during the 12 months pre- or 1 month post-index date. Patients without a PsO/PsA diagnosis during the study period (controls) were matched to cases on a 10:1 ratio based on age, sex, region, and index year; the index date was randomly selected. One-to-one propensity score matching (PSM) was conducted to compare study outcomes in the first year post-index date, including healthcare resource utilization (HRU), costs, and comorbidity incidence.

Results: A total of 7,249 cases and 72,490 controls were identified. The mean age was 48.1 years. After PSM, comorbidity incidence was higher among cases, namely dyslipidemia (18.3% vs 13.5%, p?<?.001), hypertension (13.8% vs 8.7%, p?<?.001), and obesity (8.8% vs 6.1%, p?<?.001). Case patients had significantly higher HRU and costs, including inpatient ($2,196 vs $1,642; p?<?.0016), ambulatory ($8,804 vs 4,642; p?<?.001), emergency room ($432 vs $350; p?<?.001), pharmacy ($6,878 vs $1,160; p?<?.001), and total healthcare costs ($18,311 vs $7,795; p?<?.001).

Limitations: Claims data are collected for payment purposes; therefore, such data may have limitations for clinical research.

Conclusions: During follow-up, DoD patients with moderate-to-severe PsO and/or PsA experienced significantly higher HRU, cost, and comorbidity burden.