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on Public Economics |
| By: | Lisa Grazzini (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Alessandro Petretto (Università degli Studi di Firenze, Dipartimento di Scienze Economiche) |
| Abstract: | We analyse voting on devolution of responsibilities for the provision of public goods to local governments in a federal country, with a bicameral national legislature. We suppose that devolution is a ?scal reform which reduces federal public expenditure on a national public good, and simultaneously increases transfers which regions receive from the State via a tax-sharing mechanism. This allows regions to augment their aggregate expenditure on a local public good which substitutes the reduction in a national public one. We show the conditions under which each chamber of the national parliament votes separately in favour or against devolution, and the conditions prompting the Federal government to carry out or to drop such a reform. |
| Keywords: | Fiscal federalism, Median voter, Public goods, Devolution |
| JEL: | H1 H41 H71 H77 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2007_09&r=pbe |
| By: | Mario Jametti (Department of Economics, York University); Marius Brülhart (University of Lausanne); Kurt Schmidheiny (Department of Economics and Business, Universitat Pompeu Fabra) |
| Abstract: | Low corporate taxes can help attract new firms. This is the main mechanism underpinning the standard race-to-the-bottom view of tax competition. A recent theoretical literature has qualified this view by formalizing the argument that agglomeration forces can reduce firms' sensitivity to tax differentials across locations. We test this proposition using data on firm startups across Swiss municipalities. We found that, on average, high corporate income taxes do deter new firms, but that this relationship is significantly weaker in the most spatially concentrated sectors. Location choices of firms in sectors with an agglomeration intensity at the twentieth percentile of the sample distribution are estimated to be twice as responsive to a given difference in local corporate tax burdens as firms in sectors with an agglomeration intensity at the eightieth percentile. Hence, our analysis confirms the theoretical prediction: agglomeration economies can neutralize the impact of tax differentials on firms' location choices. |
| Keywords: | Firm location, agglomeration economies, local taxation, count models, Switzerland |
| JEL: | R3 H32 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2007_9&r=pbe |
| By: | Boris Lokshin; Pierre Mohnen |
| Abstract: | This paper examines the impact of the Dutch R&D fiscal incentive program, known as WBSO, on R&D capital formation. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. An econometric model is estimated using a rich unbalanced panel covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we examine the impact of the R&D incentive program. We find evidence that the program of R&D incentives in the Netherlands has been effective in reducing the user cost of R&D and in stimulating firms’ investment in R&D. <P>Cette étude analyse l’effet du programme d’incitations fiscales à la recherche aux Pays-Bas, connu sous le nom de WBSO, sur la formation du capital de recherche. À partir d’une approche de demande de facteurs de production, nous mesurons l’élasticité du stock de capital de recherche au coût d’usage de la recherche. L’estimation économétrique se base sur un panel d’entreprises non-cylindré, couvrant la période 1996-2004, avec des coûts d’usage de la recherche variables. Nous trouvons que les incitations fiscales à la recherche ont effectivement baissé le coût d’usage de la recherche et ainsi stimulé les investissements en recherche et développement aux Pays-Bas. |
| Keywords: | R&D tax credits; panel data; crowding out; user-cost elasticity., crédit d’impôt à la recherche, données panel, coût d’usage à la recherche, crowding-out. |
| JEL: | O32 O38 H25 H50 C23 |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2007s-29&r=pbe |
| By: | Dannenberg, Astrid; Sturm, Bodo; Vogt, Carsten |
| Abstract: | This paper investigates in how far equity preferences may matter for climate negotiations. For this purposes we conducted a simple experiment with people who have been involved in international climate policy. The experiment, which was run via the Internet, consisted of two simple non-strategic games suited to measure the parameters of inequity aversion in a Fehr and Schmidt (1999) utility function. We find that our participants show aversion against advantageous as well as disadvantageous inequity to a considerable amount. Moreover, the degree of inequity aversion is higher compared to that of students in the similar study of Dannenberg et al. (2007). Regarding the geographical variety in our sample, we cannot confirm significant differences in the degree of inequity aversion between different regions in the world, which is in line with previous findings from the experimental literature. This finding lends support to the hypothesis that equity preferences are "hard-wired" and not much influenced by socio-economic or cultural circumstances. |
| Keywords: | individual preferences, inequity aversion, climate policy, experimental economics, public goods |
| JEL: | C91 C92 H41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6801&r=pbe |
| By: | Daron Acemoglu; Michael Golosov; Aleh Tsyvinski |
| Date: | 2007–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:122247000000001730&r=pbe |
| By: | Yakovlev, Evgeny; Zhuravskaya, Ekaterina |
| Abstract: | What determines the enforcement of deregulation reform of business activities? What are the outcomes of deregulation? We address these questions using an episode of a drastic reform in Russia between 2001 and 2004 which liberalized registration, licensing, and inspections. Based on the analysis of micro-level panel data on regulatory burden, we find that: 1) On average, the reform reduced the administrative costs of firms; but, the progress of reform had a substantial geographical variation. 2) The enforcement of deregulation reform was better in regions with a transparent government, low corruption, better access of the public to independent media sources, a powerful industrial lobby, and stronger fiscal autonomy. 3) Using the exogenous variation in regulation generated by the interaction of reform and its institutional determinants, we find a substantial positive effect of deregulation on net entry and small business employment and no effect on pollution and public health. The results support public choice theory of the nature of regulation and are inconsistent with the predictions of public interest theory. |
| Keywords: | Deregulation; Enforcement; Entry; Public choice; Reform; Regulation; Transparency |
| JEL: | H10 K2 K20 L50 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6610&r=pbe |
| By: | Saint-Paul, Gilles |
| Abstract: | This paper criticizes the Alesina and Ichino (2007) proposal of taxing men more than women. First, the proposal is outright sex discrimination. Second, it cannot be Pareto-improving. Third, its virtues in terms of efficiency are better obtained by gender-neutral voluntary schemes for taxing households. Fourth, the tax would further undermine marriage. |
| Keywords: | Gender; Sex; Taxation |
| JEL: | H2 J2 J3 J7 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6582&r=pbe |
| By: | Serebrisky,Tomas; Munoz-Raskin, Ramon; Gomez-Lobo, Andres; Estupinan, Nicolas |
| Abstract: | Subsidy policies on public urban transport have been adopted ubiquitously. In both developed and developing countries, subsidies are implemented to make transport more affordable. Despite their widespread implementation, there are virtually no quantitative assessments of their distributional incidence, making i t impossible to determine if these instruments are pro-poor. This paper reviews the arguments used to justify subsidy policies in public urban transport. Using different tools to quantitatively evaluate the incidence and distributive impacts of subsidy policy options, the paper analyzes the findings of a series of research papers that study urban public transport subsidy policies in developed and developing countries. The available evidence indicates that current public urban transport subsidy policies do not make the poorest better off. Supply-side subsidies are, for the most part, neutral or regressive; while demand-side subsidies perform better-although many of them do not improve income distribution. Considering that the policy objective is to improve the welfare of the poorest, it is imperative to move away from supply-side subsidies towards demand-side subsidies and to integrate transport social concerns into wider poverty alleviation efforts, which include the possibility of channeling subsidies through monetary transfer systems or through other transfer instruments (food subsidies, health services and education for the poor). The general conclusion of the paper is that more effort should be devoted to improve the targeting properties of public urban transport subsidies using means-testing procedures to ensure a more pro-poor incidence of subsidies. |
| Keywords: | Transport Economics Policy & Planning,Transport in Urban Areas,Urban Transport,Taxation & Subsidies,Economic Theory & Research |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4440&r=pbe |
| By: | Denisova, Irina; Eller, Markus; Frye, Timothy; Zhuravskaya, Ekaterina |
| Abstract: | A 2006 survey of 28,000 individuals in 28 post-communist countries reveals overwhelming support for revising privatization, but most respondents prefer to leave firms in private hands. We examine who wants to revise privatization and why. Respondents with poor human capital and few assets support revising privatization due to a preference for state over private property. Economic hardships during transition increase support for revising privatization due to the perceived unfairness of privatization. The institutional environment has no impact on how human capital and asset ownership influence attitudes toward privatization, but does affect how economic hardships during transition shape these attitudes. |
| Keywords: | demand for property rights; legitimacy of property rights; nationalization; privatization; property rights; revision; transition |
| JEL: | L33 P20 P26 P50 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6603&r=pbe |