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on Efficiency and Productivity |
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Issue of 2005‒07‒25
three papers chosen by |
| By: | Roberto Torrini (BANK OF ITALY) |
| Abstract: | Profit share in Italy has been growing between the mid-1970s and the mid-1990s, remaining stable at historically high levels since than. After dropping in the first half of the 1970s, owing to an unprecedented rapid rise in wages, profit share started to recover. The rise during the 1980s involved the entire business sector and was part of this recovery process. During the 1990s profit share continued to grow on average, but with large cross-sector differences. Profit share in manufacturing, which is more exposed to international competition, declined, together with the returns on capital stock, but increased in the rest of the business sector. We show that the better performance of the non-manufacturing business sector is mainly due to the industries most affected by the large-scale privatisations and restructuring of State-owned companies that began in the first half of the 1990s. They led to a rapid growth in total factor productivity and a deceleration in wages, without a major impact on the market power of privatised companies. On the contrary, profitability in the manufacturing sector was negatively affected by a loss of competitiveness in international markets. |
| Keywords: | factors shares, returns on capital, privatisations |
| JEL: | E25 E22 E24 L32 L33 J30 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_551_05&r=eff |
| By: | Iwan Barankay; Ben Lockwood |
| Abstract: | Advocates of fiscal decentralization argue that amongst other benefits, it can increase the productive efficiency of delivery of government services. This paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data-set of Swiss cantons. We first provide careful evidence that expenditure decentralization is a powerful proxy for factual local autonomy. Further panel regressions of Swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment. We also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing, for the Swiss case, the gender education gap. Finally, we present evidence of the importance of competence in government and how it can reinforce the gains from decentralization. |
| Date: | 2005–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:597&r=eff |
| By: | Gerhard Glomm (Indiana University); Fabio Mendez (University of Arkansas) |
| Abstract: | We use an infinitely lived agent model in which an intermediate good is provided either by a public or a private monopolist to study the effects of privatization on steady state levels of income. We allow for public sector inefficiencies(x-inefficiency) which shift down the intermediate goods technology as well as bureaucratic inefficiencies which decrease the amount of tax revenue which will actually be allocated to public investment. We solve the model numerically for reasonable parameter values. The results of the model indicate that the benefits of this type of privatizations depend crucially on the size of the relative inefficiency of public firms and the amount of public investment. Furthermore, the gains from privatization are found to be strongly related to the balance sheet of the public firm that is privatized. Privatization of public firms which run deficits (surpluses) typically generate increases (decreases) in steady state consumption. |
| Keywords: | Privatization, Deregulation, Public Inefficiency, Public Monopolies |
| JEL: | E |
| Date: | 2005–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0507024&r=eff |