New Economics Papers
on Law and Economics
Issue of 2012‒11‒11
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Economic ideas and tax policy: The introduction of progressivity in tax systems in Western Europe. The cases of France and Spain By Javier San Julian Arrupe (Universitat de Barcelona)
  2. Impact of land certification on tree growing on private plots of rural households: Evidence from Ethiopia By Mekonnen, Alemu; Ghebru, Hosaena; Holden, Stein; Kassie, Menale
  3. Size-Dependent Labor Regulations and Structural Transformation in India By Wenbiao Cai; Manish Pandey

  1. By: Javier San Julian Arrupe (Universitat de Barcelona) (Universitat de Barcelona)
    Abstract: In the last decade of the 19th century, the United Kingdom, France and Spain established progressive rates in their succession taxes. This paper compares the legislative processes that France and Spain countries followed in this matter. In both cases politicians arguments for and against progressive taxation were similar, and backed by well-known economic ideas and authors. The process in France was leaded by a majority of MPs believing that progressive taxes aided in the achievement of real justice in taxpaying. In Spain, there was not this majority, but the reform passed due to other circumstances. This would be one step in the application of new insights on tax fairness; however, proportionality as the right technique of taxation and government refrain from modifying distribution were still predominant.
    Keywords: parliament, public finance, inheritance tax, progressivity, political economy, liberalism
    JEL: K34 B12 N43 A11 H24
    Date: 2012
  2. By: Mekonnen, Alemu (Addis Ababa University and EEPFE/EDRI); Ghebru, Hosaena (IFPRI); Holden, Stein (School of Economics and Business); Kassie, Menale (CIMMYT)
    Abstract: The paper examines the impact of land certification on tree growing on private plots of rural households in the Amhara and Tigray regions of Ethiopia. Household and plot level panel data from before and after land certification from stratified random samples of households were used for the analysis. The results suggest a positive impact of land certification on tree growing on private plots of rural households. Law restrictions on tree planting on land suitable for agricultural production may explain why positive but lower investments in tree growing were found on plots that had been exposed to public conservation programs. The study questions the rationale of prohibiting tree growing on degraded agricultural land where tree growing is more profitable and more sustainable than continued growing of food crops.
    Keywords: Land certification; tenure security; incentives for tree planting; investment impact; law restrictions
    JEL: K11 Q15 Q23 Q24 Q56
    Date: 2012–09–01
  3. By: Wenbiao Cai; Manish Pandey
    Abstract: Labor regulations in India increase the cost of hiring labor for larger establishments and have been cited as an important reason for the lack of mid-sized establishments in the manufacturing sector. Using data for India, we calibrate a two-sector model in which agents differ in their managerial ability in manufacturing. In the presence of size-dependent labor regulations, the model generates the observed employment distribution across manufacturing establishments in India. In a counterfactual exercise, removing the regulations increases aggregate output per worker by 2.3% and also increases labor productivity in agriculture relative to manufacturing by 4%. We find that labor regulations in manufacturing have a detrimental effect on the productivity of the agricultural sector and hence impede the process of structural transformation.
    JEL: K31 O11 O40
    Date: 2012–10

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