nep-pbe New Economics Papers
on Public Economics
Issue of 2011‒01‒30
twenty-six papers chosen by
Keunjae Lee
Pusan National University

  1. Provincial and Local Governments in China: Fiscal Institutions and Government Behavior By Roger H. Gordon; Wei Li
  2. Tax mix corners and other kinks By Federico Revelli
  3. Tax Morale, Entrepreneurship, and the Irregular Economy By Gaetano Lisi; Maurizio Pugno
  4. Tax Competition in an Expanding European Union By Ronald B. Davies; Johannes Voget
  5. Corruption, taxation and economic growth: theory and evidence By Gbewopo Attila
  6. Is there a "zoo effect" in French local governments? By Quentin Frère; Hakim Hammadou; Sonia Paty
  7. Government Size and Macroeconomic Stability: Sub-National Evidence from China By Li, Cheng
  8. Leadership in Public Good Provision: a Timing Game Perspective By Grégoire Rota-Graziosi; Hubert Kempf
  9. Taxation of Foreign Investments in Malawi. Lessons from Japan By James , Kenani
  10. Equity and public governance in health system reform : challenges and opportunities for China By Brixi, Hana; Mu, Yan; Targa, Beatrice; Hipgrave, David
  11. Decentralization and Ethnic Conflict: The Role of Empowerment By Jean Pierre Tranchant
  12. Economic integration and political fragmentation By Grégoire Rota-Graziosi
  13. Government Size and Growth: A Survey and Interpretation of the Evidence By Bergh, Andreas; Henrekson, Magnus
  14. From IRAP to CBIT: tax distortions and redistributive effects By Manzo, Marco; Monteduro, Maria Teresa
  15. Wake up economists! - Currency-issuing central governments have no budget constraint By Lawn, Philip
  16. A Neoclassical Growth Model with Public Spending By Oliviero Carboni; G. Medda
  17. From Data to Policy Analysis: Tax-Benefit Modelling using SILC 2008 By Callan, Tim; Keane, Claire; Walsh, John R.; Lane, Marguerita
  18. Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency By Bargain, Olivier; Dolls, Mathias; Neumann, Dirk; Peichl, Andreas; Siegloch, Sebastian
  19. The Distributional Effects of Value Added Tax in Ireland By Leahy, Eimear; Lyons, Seán; Tol, Richard S. J.
  20. Fiscal Policy Space and Economic Performance: Some Stylized Facts By Céline Carrere; Jaime Melo De
  21. An index of fiscal democracy By Streeck, Wolfgang; Mertens, Daniel
  22. Small and medium enterprises : a cross-country analysis with a new data set By Ardic, Oya Pinar; Mylenko, Nataliya; Saltane, Valentina
  23. Public Science and Public Innovation: Assessing the Relationship between Patenting at U.S. National Laboratories and the Bayh-Dole Act By Link, Albert; Siegel, Donald; Van Fleet, David
  24. A Public Firm's R&D Policy and Trade Liberalization By Tomaru, Yoshihiro
  25. Fiscal Spending Multiplier Calculations based on Input-Output Tables – with an Application to EU Members By Toralf Pusch; A. Rannberg
  26. Efficient and Inefficient Welfare States By Algan, Yann; Cahuc, Pierre; Sangnier, Marc

  1. By: Roger H. Gordon; Wei Li
    Abstract: What are the incentives faced by local officials in China? Without democratic institutions, there is no mechanism for local residents to exercise “voice”. Given the hukou registration system, local residents have little opportunity to threaten “exit” if they are unhappy with local taxes and spending. This paper explores an alternative source of incentives, starting from the premise that local officials aim to maximize the jurisdiction’s fiscal residual (profits), equal to local tax revenue minus expenditures on public services. In a Tiebout setting with mobile households, this objective should lead to efficient provision. What happens, though, if firms and economic activity but not people are mobile? The paper examines the incentives faced by local Chinese officials in this context, and argues that the forecasted behavior helps to explain both the successes and the problems arising from local government activity in China.
    JEL: H7 O17 O38 O53 P16 P2 P43
    Date: 2011–01
  2. By: Federico Revelli (University of Torino)
    Abstract: This paper models the local tax mix determination process in the presence of state-wide tax limitations and shows how excess sensitivity of local public spending to grants (the conventionally and somewhat misleadingly called flypaper effect) arises in the endogenously generated constrained tax mix and cannot in general be taken as a symptom of local government overspending. By means of a panel data switching regression approach that allows for fixed effects and endogenous selection, the paper exploits the clustering of Italian Provinces at the corners produced by upper and lower tax limitations, and provides evidence of considerable cap-generated excess sensitivity.
    Keywords: Flypaper effect, excess sensitivity, tax mix, switching regression, endogenous selection
    JEL: C23 C25 H72
    Date: 2010
  3. By: Gaetano Lisi (University of Cassino); Maurizio Pugno (University of Cassino)
    Abstract: This paper incorporates tax morale into a search and matching model of equilibrium unemployment, with on-the-job search, extended to both the irregular sector and entrepreneurship. Tax morale is modelled as a social norm for tax compliance which renders evasion costly. The moral cost of tax evasion (the strength of the social norm) is negatively related to the fraction of entrepreneurs that evades taxes. Precisely, if the relationship is nonlinear, multiple equilibria may emerge, thus accounting for differences in-between regions and countries in the size of the irregular sector. The "good" equilibrium is in fact characterised, with respect to the "bad" one, by a smaller irregular sector and a stronger tax morale.
    Keywords: tax morale; tax evasion; entrepreneurship; job search; irregular economy; shadow economy
    JEL: A13 E26 H26 J24 J64 L26 K42 O17
    Date: 2011–01–18
  4. By: Ronald B. Davies (Ronald B. Davies, School of Economics, University College Dublin, Newman Building (G215), Belfield, Dublin 4, Ireland); Johannes Voget (Johannes Voget, Mannheim University, Oxford University Centre for Business Taxation , CentER Tilburg University. L9,7, 68131 Mannheim, Germany)
    Abstract: This paper empirically examines whether expansion of the EU has increased international tax competition. To do so, we use a market potential weighting scheme to estimate the slope of best responses. We find robust evidence for tax competition. In particular, our estimates suggest that EU membership affects responses with EU members responding more to the tax rates of other members. This lends credence to the above noted concerns.
    Keywords: Tax Competition; Foreign Direct Investment; Spatial Econometrics
    JEL: F1 F2 H2 H7
    Date: 2010–12
  5. By: Gbewopo Attila (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: In this paper, we analyze the interaction between corruption, taxation and economic growth. Our contributions are twofold. Theoretically, in an endogenous growth model, we introduce corruption in two different ways: corruption in the public expenditure and corruption in the public revenue. We show two opposing effects. Under certain conditions, corruption can affect growth rate positively but it can also exert a negative effect via fiscal revenue. Not only does it tend to make the tax rate, which maximizes the long run growth rate sub-optimal, but it can also create distortions that can lead to excessive tax rates harmful to growth. The empirical analyses are based on non parametric estimates as well as econometric investigations. Our results support the assumption of a non linear relationship between public resources and growth. Interactions between public resources and institutional variables evidence the following the results: (i) the more countries are corrupt the stronger the negative effects of taxation on the growth (ii) Once the negative effects of corruption are accounted
    Keywords: corruption;taxation;growth;developing countries
    Date: 2011–01–17
  6. By: Quentin Frère; Hakim Hammadou; Sonia Paty
    Abstract: From the observation that many public goods ?such as zoos? are indivisible, OATES (1988) put forward the idea that the range of public goods should increase with localities? size; this is the ?zoo effect?. But despite this argument appears obvious, it suffers from a limited empirical literature. Therefore, the purpose of the present paper is to test this theoretical argument using data on French inter-municipalities, i.e. local governments that gather several municipalities together in order to manage some local goods. Depending on their spatial position, we split our data set into three groups: urban, suburban and rural inter-municipalities. Using spatial econometrics, estimation results provide evidence for the existence of a zoo effect in French inter-municipalities. In other terms, we find that the variety of services provided in larger inter-municipalities exceeds those in smaller communities. Moreover, the intensity of the zoo effect depends on the urban-rural gradient. It is less intense in the suburban and rural areas than in the urban communities.
    Keywords: Local public services, Population size, Zoo effect, French juridictions, Intermunicipalities, spatial econometrics
    JEL: H4 H7
    Date: 2011–11–18
  7. By: Li, Cheng
    Abstract: Both theoretical predictions of Keynesian view and a large body of empirical studies on developed countries suggest that business cycle fluctuations can be partially smoothed by counter-cyclical fiscal policies. Our paper extends this strand of literature by considering the nexus between output fluctuations and government size in the context of Chinese fiscal federalism. Using a sample of 29 Chinese provinces for the period of 1994-2007, we fail to provide consistent evidence for the stabilizing effect of fiscal policies. In particular, we find that under the tax assignment system (fen shui zhi), neither the central government’s fiscal transfers nor the provincial budgetary and extra-budgetary revenues help reduce economic volatility. Such results are shown to be robust across different model specifications, volatility measures and estimation techniques.
    Keywords: business cycles; government size; fiscal federalism; China
    JEL: E62 E32 H5
    Date: 2010
  8. By: Grégoire Rota-Graziosi (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Hubert Kempf (Paris School of Economics - Université Panthéon-Sorbonne - Paris I)
    Abstract: We address in this paper the issue of leadership when two governments provide public goods to their constituencies with cross border externalities as both public goods are valued by consumers in both countries. We study a timing game between two different countries: before providing public goods, the two policymakers non-cooperatively decide their preferred sequence of moves. We establish conditions under which a first- or second-mover advantage emerges for each country, highlighting the role of spillovers and the strategic complementarity or substitutability of public goods. As a result we are able to prove that there is no leader when, for both countries, public goods are substitutable. When public goods are complements for both countries, both countries may emerge as the leader in the game. Hence a coordination issue arises. We use the notion of risk-dominance to select the leading government. Lastly, in the mixed case, the government for whom public goods are substitutable becomes the leader.
    Keywords: public good;Spillovers;Subgame Perfect Equilibrium;Strategic Complements;Stackelberg;Pareto Dominance;Risk Dominance
    Date: 2011–01–18
  9. By: James , Kenani
    Abstract: Foreign investments remain an important source of economic growth in both developing and developed countries. Their contribution to capital formation, employment opportunities, revenues and technology to the host countries are likely to continue creating strong competition among countries in attracting them. In order to be competitive, developing countries provide generous tax incentives to MNEs which tend to encourage high incidence of tax avoidance and evasion. With inadequate institutional capacity to ensure tax compliance, governments are losing more tax revenues from the MNEs who use complex accounting mechanisms to avoid tax payments. This paper has explained how Malawi Government has been taxing foreign investments to achieve optimal balance of increasing domestic resource mobilization and considerably attract new foreign investments. The central objective of the paper was to investigate taxation of the foreign investments in Malawi. The study primarily focused on Malawi tax system in comparison with international taxation from Japanese tax system. Furthermore, the paper investigated tax anti-avoidance measures that are available in domestic legislations which ensure tax compliance from the MNEs. The paper also discussed tax erosion practices that are associated with MNEs such as transfer pricing, internal debt arrangements among others that help to reduce taxable income of the MNEs. The paper has provided the shortfalls of Malawi international taxation system and some practical solutions have been recommended emanating from Japanese tax system.
    Keywords: Malaw; Japan; MNEs;Foreign Investments; International Taxation
    JEL: P33
    Date: 2010–05
  10. By: Brixi, Hana; Mu, Yan; Targa, Beatrice; Hipgrave, David
    Abstract: Achieving the objective of China's current health system reform, namely equitable improvements in health outcomes, will be difficult not least because of the continuously growing income disparities in the country. The analysis in this paper shows that since 2000, disparity in selected health outcomes has been declining across provinces, largely due to earmarked central government allocations. By contrast, public expenditure on health is increasingly regressive (positively correlated with local income per capita) across provinces, and across prefectures and lower levels within provinces. The increasing inequity in public expenditure at sub-national levels indicates that incentives, responsibilities, and resources at sub-national levels are not well aligned with China's national priorities. To address the weaknesses in equity and efficiency that characterize China's health system and health outcomes, China's health system reform may require complementary reforms to improve governance for public service delivery across sectors.
    Keywords: Health Monitoring&Evaluation,Population Policies,Public Sector Economics,Health Systems Development&Reform,Health Economics&Finance
    Date: 2011–01–01
  11. By: Jean Pierre Tranchant (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Decentralization is increasing in all parts of the world. Assessing the efficiency of decentralization as a means to mitigate ethnic conflict is then of primarily importance. This paper builds a simple model of decentralization as an empowerment mechanism. It suggests that decentralization could promote peace conditional on a set of countries and groups characteristics. Typically, decentralization should empower minorities which are small at the national level, while representing a critical mass of the population in the regions they live in. Empirical results confirm that decentralization impacts ethnic conflict only when those conditioning factors are controlled for. Furthermore, decentralization dampens all forms of ethnic violence for groups spatially concentrated enough and/or for groups having a local majority. In contrast, it fuels protest and even rebellion for groups lacking one. The paper then highlights the crucial need to build checks and balances mechanisms at the regional level for local minorities not being harmed by the decentralization process.
    Keywords: Minorities;Conflict;decentralization;Panel Data Analysis
    Date: 2011–01–18
  12. By: Grégoire Rota-Graziosi (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The purpose of this article is to provide an economic analysis of the relationship between economic integration and political fragmentation. This follows previous contributions from Alesina et al (2000), Casella (2001, Casella and Feinstein (2002), or Leite-Monteiro and Sato (2003). We go a step further than these authors by assuming that economic integration and political fragmentation are both decided by a majority vote. As them, we observe that economic integration involves political fragmentation. But, we establish also that economic integration might be sometimes deterred by the majority to prevent political fragmentation from happening.
    Keywords: economic integration;public good;secession;vote
    Date: 2011–01–18
  13. By: Bergh, Andreas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: The literature on the relationship between the size of government and economic growth is full of seemingly contradictory findings. This conflict is largely explained by variations in definitions and the countries studied. An alternative approach—of limiting the focus to studies of the relationship in rich countries, measuring government size as total taxes or total expenditure relative to GDP and relying on panel data estimations with variation over time—reveals a more consistent picture. The most recent studies find a significant negative correlation: An increase in government size by 10 percentage points is associated with a 0.5 to 1 percent lower annual growth rate. We discuss efforts to make sense of this correlation, and note several pitfalls involved in giving it a causal interpretation. Against this background, we discuss two explanations of why several countries with high taxes seem able to enjoy above average growth: (i) that countries with higher social trust levels are able to develop larger government sectors without harming the economy, and (ii) that countries with large governments compensate for high taxes and spending by implementing market-friendly policies in other areas. Both explanations are supported by current research.
    Keywords: Government size; Government expenditure; Economic growth; Economic freedom; Globalization; Taxation; Cross-country regressions
    JEL: E62 H11 H20 O23 O43
    Date: 2011–01–03
  14. By: Manzo, Marco; Monteduro, Maria Teresa
    Abstract: The paper explores the differences between IRAP (the Regional Tax on Productive Activities) and CBIT (the Comprehensive Business Income Tax), which approximately corresponds to allow the deduction of labor cost from the taxable base of IRAP. By developing a DSGE model that ncorporates business taxes, like IRAP or CBIT, we find that tax distortions due to IRAP are more contractionary than those caused by the presence of CBIT. Empirically, tax revenues and redistributive effects are more carefully analyzed. We implement a microsimulation model (MSM) based on a dataset of more than 150,000 incorporated firms. We show that small incorporated firms are particularly harmed by IRAP, especially when business run a loss instead of a profit. This is due to the fact that IRAP is a business tax on value added, which does not allow for the deduction of labor cost. For this purpose, we focus on the introduction of a reform based on the CBIT principle. Our result is that CBIT is particularly costly and more able to enhance the profitability for larger enterprises. Moreover, the tax design of CBIT is more regressive compared to the IRAP including tax allowances. Consequently, an efficiency-equity trade-off between IRAP and CBIT might be emphasized
    Keywords: business cycles; tax distortions; micro-simulations models; distributive effects; Italy.
    JEL: E62 E32 H25 H32
    Date: 2010–08
  15. By: Lawn, Philip
    Abstract: Abstract: Despite what mainstream economists preach, currency-issuing central governments have no budget constraint. It is therefore incumbent upon them to use their unique spending and taxing powers to achieve the broader goal of sustainable development. Their failure to do so has meant that nations have fallen well short of realising their full potential. Rather than accept the neo-liberal myth that ‘small government is best’, the citizens of a nation should welcome the central-government’s responsible use of their unique spending and taxing powers to provide sufficient public goods and critical infrastructure, achieve and maintain full employment, resolve critical social and environmental concerns, and meet the requirements of an aging population. Should central governments fail in their responsibility to prudently use their unique powers, public disapproval is best registered through the ballot box, not through degenerative debates that distort the facts about the operation of a modern, fiat-currency economy.
    Keywords: Keywords: Central governments; government budgets; fiscal and monetary policy; sustainable development
    JEL: E62 B50
    Date: 2011–01–05
  16. By: Oliviero Carboni; G. Medda
    Abstract: This paper analyses the effect of public expenditures in the context of a modified Solow model of capital accumulation with optimising agents. The model identifies optimal government size and optimal composition of public expenditures which maximize the rate of growth in the dynamics to the steady state and maximize the long run level of per capita income. Different allocations of public resources lead to different growth rates in the transitional dynamics depending on their elasticity. However effects from fiscal policy are only temporary and disappear in the steady state. Finally we argue that neglecting the non- linear nature of the relationship between government spending and growth may lead empirical studies to biased results.
    Keywords: neoclassical and augmented growth models; fiscal policy; public spending composition.
    JEL: E13 E62 H20 H50 O40
    Date: 2010
  17. By: Callan, Tim; Keane, Claire; Walsh, John R.; Lane, Marguerita
    Keywords: data/Policy/modelling
    Date: 2010–10
  18. By: Bargain, Olivier (University College Dublin); Dolls, Mathias (University of Cologne); Neumann, Dirk (University of Cologne); Peichl, Andreas (IZA); Siegloch, Sebastian (IZA)
    Abstract: Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor supply elasticities on microdata and adopt an inverted optimal tax approach to characterize the redistributive preferences embodied in the welfare systems of 17 EU countries and the US. Implicit social welfare functions are broadly compatible with the fiction of an optimizing Paretian social planner. Some exceptions due to generous demogrant transfers are consistent with the ignorance of behavioral responses by some European governments and are partly corrected by recent policy developments. Heterogeneity in leisure-consumption preferences somewhat affect the international comparison in degrees of revealed inequality aversion, but differences in social preferences are significant only between broad groups of countries.
    Keywords: social preferences, redistribution, optimal income taxation, labor supply
    JEL: H11 H21 D63 C63
    Date: 2011–01
  19. By: Leahy, Eimear; Lyons, Seán; Tol, Richard S. J.
    Abstract: In this paper we examine the distributional effects of Value Added Tax (VAT) in Ireland. Using the 2004/2005 Household Budget Survey, we assess the amount of VAT that households pay as a proportion of weekly disposable income. We measure VAT payments by equivalised income decile, households of different composition and different household sizes. The current system is highly regressive. With the use of a micro-simulation model we also estimate the impact of changing the VAT rate on certain groups of items and the associated change in revenue. We also consider how the imposition of a flat rate across all goods and services would affect households in different categories. The Irish Government has recently announced that it proposes to increase the standard rate of VAT to 22% in 2013 and to 23% in 2014. We examine the distributional implications of such increases. The general pattern of results shows that those hardest hit are households in the first income decile, households in rural areas, 6 person households and households containing a single adult with children.
    Keywords: taxes/Ireland/Household budget/children
    Date: 2010–12
  20. By: Céline Carrere (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Jaime Melo De (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper complements the cross-country approach by examining the correlates of GDP per capita growth acceleration around “significant” public expenditure episodes by reorganizing the data around turning points, or “events”. Here we define (i) a growth event as an increase in average per capita growth of at least 2 percentage points (pp) sustained for 5 years, (ii) fiscal event as an increase in the primary fiscal expenditure annual growth rate of approximately 1 pp sustained for 5 years and not accompanied by an aggravation of the fiscal deficit beyond 2% of GDP. These definitions of events are applied to database of 140 countries (118 developing countries) over 1972-2005, providing a summary but encompassing description of “what is in the data”. For this sample, the probability of occurrence of a fiscal event is about 10%, and, for a large range of parameter values for the selection of a “significant” event, the probability of a growth event once a fiscal event had occurred is in the 22%- 28% range. The probability of occurrence of a fiscal event is higher for the bottom half of the income distribution of countries, but the probability that this fiscal event is followed by a growth event is higher for the third quartile, corresponding to middle income countries (which are largely in Latin America). The probability of a fiscal event not followed by a growth event is significantly higher for the Middle East and Africa region. The description of the changes in expenditures components during fiscal events shows that, for developing countries, there are notable differences underlying fiscal events followed by growth events: they occur under situations of (i) significant lesser deficit, (ii) fewer resources devoted to non-interest General Public Services and (iii) shift in discretionary expenditures towards Transport & Communication. After controlling for the growth-inducing effects of positive terms-of-trade shocks and of trade liberalization reform, probit estimates indicate that a growth event is more likely to occur in a developing country when surrounded by a fiscal event. Moreover, the probability of occurrence of a growth event in the years following a fiscal event is greater the lower is the associated fiscal deficit, confirming that success of a growth-oriented fiscal expenditure reform hinges on a stabilized macroeconomic environment (through limited primary fiscal deficit).
    Keywords: cerdi
    Date: 2011–01–18
  21. By: Streeck, Wolfgang; Mertens, Daniel
    Abstract: Over the past four decades, the accumulation of policy legacies and public debt has led to a decline in fiscal flexibility in Germany and the United States. By applying an index of fiscal democracy to Germany, the paper illustrates the associated shrinkage of democratic control over budget priorities and compares the developments in both countries. -- In den vergangenen vier Jahrzehnten hat die Anhäufung politischer Erblasten und öffentlicher Verschuldung sowohl in Deutschland als auch in den USA zu einer Abnahme fiskalischer Flexibilität geführt. Anhand eines Fiscal Democracy Index für Deutschland schildert der Aufsatz die damit einhergehende Verringerung demokratischer Kontrolle budgetärer Prioritäten und vergleicht die Entwicklungen in beiden Ländern.
    Date: 2010
  22. By: Ardic, Oya Pinar; Mylenko, Nataliya; Saltane, Valentina
    Abstract: In the aftermath of the global financial crisis of 2008-2009, there has been an increased interest in the role of small and medium enterprises in job creation and economic growth. However the lack of consistent indicators at the country level restricts extensive cross-country analyses of lending to small and medium enterprises. This paper introduces a new dataset to fill this gap in the small and medium enterprise data landscape. In addition, it provides the first set of results of analyses with this new dataset, predicting the global small and medium enterprise lending volume to be $10 trillion. The bulk of this volume, 70 percent, is in high-income countries. On average, small and medium enterprise loans constitute 13 percent of gross domestic product in developed countries and 3 percent in developing countries. Note that although a unique small and medium enterprise definition does not exist, differences in definitions across countries are not statistically significant in explaining the differences in small and medium enterprise lending volumes.
    Keywords: Access to Finance,Banks&Banking Reform,Debt Markets,Microfinance,Bankruptcy and Resolution of Financial Distress
    Date: 2011–01–01
  23. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Siegel, Donald (SUNY Albany); Van Fleet, David (Arizona State University)
    Abstract: Most studies of the effects of the Bayh-Dole Act have focused on universities. In contrast, we analyze patenting activity at two prominent national laboratories, Sandia National Laboratories and the National Institute of Standards and Technology before and after the enactment of this legislation and the Stevenson-Wydler Act. It appears as though the enactment of Bayh-Dole and the Stevenson-Wydler Act were not sufficient to induce an increase in patenting at these labs. However, the establishment of financial incentive systems, embodied in passage of the Federal Technology Transfer Act, as well as the allocation of internal resources to support technology transfer, stimulated an increase in such activity.
    Keywords: U.S. National Laboratories; Patenting; Technology Transfer; Bayh-Dole Act; Stevenson-Wydler Act; Federal Technology Transfer Act
    JEL: H10 O30
    Date: 2011–01–16
  24. By: Tomaru, Yoshihiro
    Abstract: This paper studies a public firm's incentive to raise its productive efficiency by undertaking cost-reducing R&D investment when it competes against a foreign private firm. Our focus is to ravel out how a decrease in an importing tariff levied on foreign goods affects this investment level inter alia. We show that when the government imposes non-negative tariffs, a tariff reduction lowers the R&D investment, irrespective of whether the public firm has downward or upward sloping reaction curve. Namely, R&D investment conducted by the public firm is substitutable to an importing tariff. Furthermore, under a linear demand assumption, it is concluded that a tariff reduction necessarily enhances world welfare if both R&D investment and tariffs are set to domestic welfare-maximizing levels. More strict assumptions on marginal cost and R&D cost function make complete trade liberalization desirable from the viewpoint of world welfare.
    Keywords: Mixed Oligopoly; R&D; Trade Liberalization
    JEL: L32 F13 L13
    Date: 2010–08
  25. By: Toralf Pusch; A. Rannberg
    Abstract: Fiscal spending multiplier calculations have been revived in the aftermath of the global financial crisis. Much of the current literature is based on VAR estimation methods and DSGE models. The aim of this paper is not a further deepening of this literature but rather to implement a calculation method of multipliers which is suitable for open economies like EU member states. To this end, Input-Output tables are used as by this means the import intake of domestic demand components can be isolated in order to get an appropriate base for the calculation of the relevant import quotas. The difference of this method is substantial – on average the calculated multipliers are 15% higher than the conventional GDP fiscal spending multiplier for EU members. Multipliers for specific spending categories are comparably high, ranging between 1.4 and 1.8 for many members of the EU. GDP drops due to budget consolidation might therefore be substantial if monetary policy is not able to react in an expansionary manner.
    Keywords: fiscal spending multiplier calculation, Input-Output calculus, income- expenditure model, European Union, stimulus, consolidation
    JEL: B22 C67 E12 E62
    Date: 2011–11
  26. By: Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris); Sangnier, Marc (Paris School of Economics)
    Abstract: This paper shows that cross country differences in the generosity and the quality of the welfare state are associated with differences in the trustworthiness of their citizens. We show that generous, transparent and efficient welfare states in Scandinavian countries are based on the civicness of their citizens. In contrast, the generosity but low transparency of the Continental European welfare states survive thanks to the support of a large share of uncivic individuals who consider that it can be justifiable to misbehave with taxes and social benefits. We also explain why countries with an intermediate degree of trustworthiness of their citizens and of transparency of the government, like Anglo-Saxon countries, have small welfare states. Overall, this paper provides a rationale for the observed persistence of both efficient and inefficient welfare states, as a function of the civicness of the citizens.
    Keywords: welfare state, trust, civism, corruption
    JEL: H1 Z1
    Date: 2011–01

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