New Economics Papers
on Law and Economics
Issue of 2013‒12‒20
five papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Fighting African corruption when existing corruption-control levels matter in a dynamic cultural setting By Asongu , Simplice A
  2. The policy response to macroeconomic and fiscal imbalances in Italy in the last fifteen years By Antonio Bassanetti; Matteo Bugamelli; Sandro Momigliano; Roberto Sabbatini; Francesco Zollino
  3. Terms of Joining Russian Federation to World Trade Organization: Necessity and Compromises By Itskovich, Alexander U.
  4. Learning about fiscal policy and the effects of policy uncertainty By Hollmayr, Josef; Matthes, Christian
  5. Labour Market Developments and Social Welfare By Hermine Vidovic

  1. By: Asongu , Simplice A
    Abstract: Purpose – This paper assesses the determinants of corruption-control with freedom dynamics (economic, political, press and trade), government quality and a plethora of socio-economic factors in 46 African countries using updated data. Design/methodology/approach – A quantile regression approach is employed while controlling for the unobserved heterogeneity. Principal component analysis is also used to reduce the dimensions of highly correlated variables. Findings – With the legal origin fundamental characteristic, the following findings have been established. (1) While political freedom increases corruption-control (CC) in a bottom quantile of English common law countries, there is no such evidence in their French civil law counterparts. (2) Government quality consistently improves CC across all quantiles in English common law countries but fails to exert the same effect in middle quantiles of French civil law countries. (3) Economic freedom ameliorates CC only in common law countries with low existing CC levels (bottom quantiles). (4) We find no significant evidence of a positive ‘press freedom’-CC nexus and having the status of Low income English common law (French civil law) countries decreases (increases) CC. From a religious domination scenario, we also find the following. (1) Political and trade freedoms only reduce CC in Christian dominated countries while press freedom has a mitigation effect in both religious cultures (though more consistent across quantiles of Christian-oriented countries). (2) Government quality is more pro-CC in Christian than in Muslim-dominated countries. (3) While economic freedom has a scanty negative nexus with CC in Christian-oriented countries, the effect is positive in their Muslim-dominated counterparts. (4) Having a low-income status in countries with Christian common law tradition improves CC. Originality/value – We complement the literature on the fight against corruption in Africa by employing recently documented additional factors that should be considered in corruption studies.
    Keywords: Corruption; Freedom; Government quality; Quantile regression; Africa
    JEL: C10 H10 K10 O10 O55
    Date: 2013–09
  2. By: Antonio Bassanetti (Bank of Italy and IMF); Matteo Bugamelli (Bank of Italy); Sandro Momigliano (Bank of Italy); Roberto Sabbatini (Bank of Italy); Francesco Zollino (Bank of Italy)
    Abstract: This paper reviews the main macroeconomic trends and the debate on policy priorities in Italy since the end of the Nineties. In the decade up to the outbreak of the global crisis (1998-2007), in Italy the reform process came to a virtual standstill; this is partly due to the fragmentation of the political constituency, while a variety of favourable contingent factors masked the difficulties of the productive system. Had Italy been better positioned in terms of public finances and structural features in 2007, some of the adverse effects of the global and sovereign crises would have been avoided.
    Keywords: EMU, fiscal policy, macroeconomic imbalances, global crisis
    JEL: E6 H3 K0 N1
    Date: 2013–11
  3. By: Itskovich, Alexander U.
    Abstract: The negotiations about the joining of Russian Federation (RF) to the World Trade Organization (WTO) were carried on in the period from 1993 till up 2012 years. The President of Russia undersigned on July 21, 2012 a Federal Law ''About the Ratification of the Protocol about the Joining of RF to the Marrakesh Agreement of the World Trade Organization Foundation of April 15, 1994''. After this ratification Russia becomes a member of the WTO and assumes corresponding obligations established by multilateral trade agreements. The Protocol becomes also a part of the legal foundations of Russian Federation. In a case when the Protocol establishes some other rules than the Russian Law are used the rules of the Protocol. One of the problems, which dragged the process of negotiations, remained, besides the other ones, obligations in the field of agriculture. In particular, in the sphere of the introduction of limitations corresponding the amount of the state supporting which one country, a member of the WTO, would be able to put at the disposal of national agroproducers. Nowadays the amount of the state supporting in regard of the agricultural sector makes up about 3.5 billions of the USD dollars annually. At the time of the joining the WTO it was determined in the amount of 9.0 billions of the USD dollars annually. In the following, in the period from 2012 till up 2017 years it would be reduced according to the corresponding schedule till 4.4 billions of the USD dollars annually. The necessity of the Russia’s joining to the WTO is explained on the ground of that fact that according to the rules and norms of the WTO are regulated more than 90 percents of the world trade with goods and services. At the same time the main form of the world economic connections as before remains the international trade which according to its dynamic and value indices leave behind the growth of the world production, the flow of capital and other kinds of international connections. According to the WTO data the amounts of the world agricultural foodstuffs export/import made up in 2000 year 558 billions of the USD dollars. The share of Russia in the export made up 1.3 percents and in the import 1.9 percents. The lack of balance in this sector of the international trade meant for Russia the loss of 3.3 billions of the USD dollars annually. The amount of import to Russian Federation increased in 2011 year compared with 2010 year by 30,0 percents and reached 323.3 billions of the USD dollars. At the same time the share of the agricultural sector in the import reached about 13.0 percents or 42.5 billions of the USD dollars. In the same period of time, according to the data of the Central Bank of Russia, the export of RF made up 521.4 billions of the USD dollars and increased by 30.2 percents, but the share of the agricultural sector only made up 2.3 percents of the total export.
    Keywords: World Trade Organization (WTO), ''yellow basket'', ''green basket'', conditions of ''WTO-plus'' regime, Agribusiness, International Relations/Trade,
    Date: 2013–08
  4. By: Hollmayr, Josef; Matthes, Christian
    Abstract: The recent crisis in the United States has often been associated with substantial amounts of policy uncertainty. In this paper we ask how uncertainty about fiscal policy affects the impact of fiscal policy changes on the economy when the government tries to counteract a deep recession. The agents in our model act as econometricians by estimating the policy rules for the different fiscal policy instruments, which include distortionary tax rates. Comparing the outcomes in our model to those under full-information rational expectations, we find that assuming that agents are not instantaneously aware of the new fiscal policy regime (or policy rule) in place leads to substantially more volatility in the short run and persistent differences in average outcomes. --
    Keywords: DSGE,Fiscal Policy,Learning
    JEL: E32 D83 E62
    Date: 2013
  5. By: Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Summary Employment and activity rates in the new EU Member States (NMS) declined significantly up to the early 2000s and started to increase along with strong GDP growth thereafter. Job losses following the outbreak of the economic and financial crisis varied substantially across countries and have not been offset yet. Overall, the low-educated and the young people are very disadvantaged on the NMS labour markets. With the exception of Poland and Slovenia, non-standard types of employment are uncommon in the NMS, following the pattern of Southern EU countries. Employment protection legislation has been adjusted to ‘European standards’ in the entire region. Union density and consequently the impact of trade unions on wage setting and employment in the NMS fell dramatically. In all NMS unemployment insurance schemes as well as minimum wage regulations were introduced at the beginning of the 1990s, but are less generous than in the EU-15.
    Keywords: labour market, labour market institutions
    JEL: J21 J52 J60 J64 J65 K31
    Date: 2013–11

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