Corruption and the Provision of Public Output in a Hierarchical Asymmetric Information Relationship

This paper develops a principal‐agent model to explore the interaction of corruption, bribery, and political oversight of production. Under full information, an honest politician achieves the first best while a dishonest politician creates shortages and bribes. Under asymmetric information, an honest politician may create more shortages relative to a dishonest one, but the latter creates more bribes. The model identifies a tradeoff between bribery and efficiency. This helps to reconcile some conflicting results on the implications of corruption for the size of the public sector. It also provides new results on the circumstances under which an improvement in the auditing technology is beneficial. The paper identifies conditions under which corruption is welfare enhancing. However, the paper also shows that under precisely these conditions private provision, even by an unregulated monopolist, would be better than public provision.     

The usage of media across product classes: the influence of demographics and psychographics

The purpose of this study was to investigate the differences in the types of media used for four product classes, and to examine the effect of respondent's demographics and psychographics on the types of media. Eight hundred and four respondents were randomly selected from the population (8040) of five residential sections of Lubbock, Texas, by using systematic sampling. Different merchandise names representing the classes of product were listed in the questionnaire. The respondents were asked to rate each type of merchandise according to the order of media usage when they purchased the merchandise. One hundred and fifty-two questionnaires were analysed by factor analysis, multivariate analysis of variance, and Friedman two-way analysis of variance by ranks. Eight psychographic factors extracted by factor analysis were Traditional, Self-confident, Satisfied with Finances, Satisfied with Friends, Living Optimist, Self-conscious, Community Minded, and Homebody. Self-conscious was the only factor to affect the consumers' usage of newspapers, television, radio, magazines and direct mail. In addition, the usage of television was affected by the Satisfied with Finances factor. The demographic variables of marital status, age, education, ethnic group, political outlook, occupation and social level influenced the usage of newspapers, magazines, radio, television and direct mail. The usage of television was affected by one's political affiliation. Income did not influence media usage. The findings indicated that the individual's usage of the newspapers, television, radio, magazines and direct mail was affected by the classes of products: convenience, preference, shopping and speciality goods.     

In Defence of Neo-Classical Neo-Populism

This paper is a response to the discussion in the special issue of this Journal on Redistributive Land Reform Today (Vol. 4, Nos. 1 and 2). We begin by attempting to clarify the methodological debate, differentiating our approach, which our critics call neo-classical neo-populism, from mainstream neo-classical economics and historical materialism. We then distinguish between land tenure reforms and redistributive land reforms, and argue that it is the latter that really matter. Next, we address the issue of the inverse relationship between farm size and productivity. Fourth, we discuss cases in which systems of labour control are used to transform the peasantry into a landless rural proletariat and challenge the view that systems of labour control can usefully be reduced to a problem of transaction costs. We end with discussions of reform in the transition economies, China and Bangladesh, where we defend the view that it is the distribution of landownership rather than operational holdings that largely determines the extent of poverty.     

OPTIMAL GROWTH IN A TWO‐SECTOR RSS MODEL WITHOUT DISCOUNTING: A GEOMETRIC INVESTIGATION*

This essay reports results on optimal growth in a two‐sector model with fixed coefficients, irreversible investment and no discounting. Under normalization, the model can be represented by two real numbers, but despite its deceptive simplicity, it admits rich transition dynamics and apparent pathologies that seem to have been missed in earlier work. From a methodological point of view, and in the light of recent work of Nishimura and Yano, this essay can also be seen as a further rehabilitation of geometric methods as an engine of analysis.     

Optimum Distribution-Free Tests and Further Evidence of Heteroscedasticity in the Market Model

In this paper several powerful distribution-free tests for heteroscedasticity are introduced and are used to test the hypothesis of constant variance in the market model. These tests are noted for their flexibility in specifying alternative hypotheses. It is found that the assumption of homoscedasticity is untenable for the majority of stocks analyzed. The implications of this finding for the efficient estimation of the parameters of the market model are also discussed.     

Existence of a Condorcet Winner When Voters Have Other‐Regarding Preferences

In standard political economy models, voters are “self‐interested” that is, care only about “own” utility. However, the emerging evidence indicates that voters often have “other‐regarding preferences” (ORP), that is, in deciding among alternative policies voters care about their payoffs relative to others. We extend a widely used general equilibrium framework in political economy to allow for voters with ORP, as in Fehr and Schmidt (1999) . In line with the evidence, these preferences allow voters to exhibit “envy” and “altruism,” in addition to the standard concern for “own utility.” We give sufficient conditions for the existence of a Condorcet winner when voters have ORP. This could open the way for an incorporation of ORP in a variety of political economy models. Furthermore, as a corollary, we give more general conditions for the existence of a Condorcet winner when voters have purely selfish preferences.