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on Positive Political Economics |
| By: | Lehman, Dave |
| Keywords: | Agricultural and Food Policy, Marketing, Political Economy, Public Economics, |
| Date: | 2015–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usao15:204991&r=pol |
| By: | Hafemeister, Jason |
| Keywords: | Agricultural and Food Policy, Marketing, Political Economy, |
| Date: | 2015–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usao15:204997&r=pol |
| By: | Cremer, Helmuth; Roeder, Kerstin |
| Abstract: | This paper studies the political economy of a basic income (BI) versus a means tested welfare scheme. We show in a very simple setting that if society votes on the type of system, its generosity as well as the “severity” of means testing (if any), a BI system could only emerge in the political equilibrium under very strong and empirically implausible conditions. Instead, the political process leads to a means tested system. The necessity to draw political support does affect the design of the system, but it only implies that means testing becomes less severe so that benefits are extended also to themiddle classes. However, a fully universal system is rejected by a majority. |
| Keywords: | Basic income, Means testing, Political support |
| JEL: | D3 D7 H2 H5 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:29486&r=pol |
| By: | David Green (Institute for Fiscal Studies and University of British Colombia) |
| Abstract: | I undertake a political economy exercise of a type described in John Rawls' A Theory of Justice; namely, one in which economic institutions are judged by how well they match the key principles in theories of distributive justice. My main contention is that such an exercise is integrally related not only to economics in general but to empirical economics in particular. I argue that most standard theories of justice place a large weight on self and social respect and that such respect has a lot to do with the position a person holds in the productive process - their wage and employment outcomes. That, in turn, means that assessments of justice in the real world hinge critically on how labour markets actually function in assigning wages and employment. The answers to these questions are ultimately empirical. I explore these ideas by examining one particular institution (the minimum wage) in relation to a set of the most prominent recent theories of distributive justice. This exercise leads to a different emphasis on what minimum wage related outcomes need study, and to a claim that minimum wage setting is related to standards of fairness. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:14/24&r=pol |
| By: | Farré, Lídia (University of Barcelona); Ortega, Francesc (Queens College, CUNY); Tanaka, Ryuichi (University of Tokyo) |
| Abstract: | This paper empirically analyzes the effects of immigration on the schooling decisions of natives. We employ household-level data for Spain for years 2000-2012, a period characterized by a large immigration wave and a severe recession. Our estimates reveal that Spanish households responded to immigration by increasing their educational expenditures. This result was mainly driven by an important native flight from tuition-free schools toward private ones. We also find strong evidence of cream-skimming: only the more educated native households switched to private schools in response to immigration. Finally, our simulations suggest that the reduction in household income due to the Great Recession mitigated the flight toward private schools triggered by immigration but was not enough to offset it. We argue that these findings are driven by several factors: school assignment rules, concerns over negative peer effects, and political economy forces. |
| Keywords: | education, public school, recession, immigration |
| JEL: | D7 F22 H52 H75 J61 I22 I24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9234&r=pol |
| By: | Holger Sieg (University of Pennsylvania); Daniele Coen-Pirani (University of Pittsburgh); Jeffrey Brinkman (Federal Reserve Bank of Philadelphia) |
| Abstract: | The purpose of this paper is to provide an explanation of the political and economic determinants of underfunding of municipal pension funds. We develop a new dynamic politico-economic model within an overlapping generations framework. The key insight of the model is that underfunding can result in equilibrium even if individuals are fully informed, perfectly rational, and forward looking, and policies are capitalized in housing or land prices. Funding policies matter if housing also serves as collateral for households that are potentially credit constrained. The model suggests that differences in funding levels are systematically related to differences in economic fundamentals such as wage levels, the size of the public sector in a city, and the compensation of public sector workers measured by the current wage and retirement benefiÂÂ…ts. Finally, our analysis has some important policy implications. A policy intervention that mandates higher funding rates for municipalities than those adopted in equilibrium improves household welfare. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:345&r=pol |
| By: | Jorge F. Garzón |
| Abstract: | The landscape of Latin American regionalism has experienced profound transformations in a relatively short period of time. Regional organizations have proliferated; the open regionalism of the 1990s has gone into decay; new organizations, often referred to as belonging to a new wave of a more political “posthegemonic regionalism,” took center stage; only to be displaced in the attention of observers by newer trade-oriented organizations such as the Pacific Alliance. These developments have been puzzling scholars and policy makers, who for their most part have tended to converge on the view that a fragmented regional configuration with diverging or even incompatible models of regional integration is on the rise. This article challenges this interpretation by arguing that many of the trends we observe are rather the result of Latin American states’ practical adaptation of their foreign policy strategies to the emergence of a multipolar political economy in the international system. One important consequence of this process of adaptation, I argue, is a “decoupling” of the economic function of regionalism from its other dimensions – a process that I show is facilitating the emergence of a regional architecture characterized by a finer division of labor among organizations. |
| Keywords: | regionalism, regional organizations, Latin America, multipolarity, foreign economic policy, open regionalism, posthegemonic regionalism, cross regionalism |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2015/23&r=pol |
| By: | Bernard M. Hoekman; Petros C. Mavroidis |
| Abstract: | Services are typically regulated for a variety of reasons. Regulation is typically influenced by political economy forces and may thus at times reflect protectionist motivations. Similar considerations arise for goods, but the potential for protectionist capture may be greater in services as many are self-regulated by domestic industry. The GATT embodies specific disciplines on product regulation in a separate agreement on technical barriers to trade (TBT) encouraging the use of international standards and norms that only impact on trade to the extent necessary to achieve the regulatory objective. The GATS does not include similar disciplines. We discuss reasons for this discrepancy and assess whether consideration should be given to seeking to adopt the TBT-type disciplines that apply to trade in goods. |
| Keywords: | Trade Agreement, |
| JEL: | F13 K33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2015/25&r=pol |
| By: | Thomas, Alban; Zaporozhets, Vera |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29320&r=pol |
| By: | De Donder, Philippe; Martinez-Mora, Francisco |
| Abstract: | We study the political determination of the proportion of students attending university when access to higher education is rationed by admission tests. Parents differ in income and in the ability of their unique child. They vote over the minimum ability level required to attend public universities, which are tuition-free and financed by proportional income taxation. University graduates become high skilled, while the other children attend vocational school and become low skilled. Even though individual preferences are neither single-peaked nor single-crossing, we obtain a unique majority voting equilibrium, which can be either classical (with 50% of the population attending university) or ends-against- the-middle, with less than 50% attending university (and parents of low and high ability children favoring a smaller university system). The majority chosen university size is smaller than the Pareto efficient level in an ends-against-the-middle equilibrium. Higher income inequality decreases the majority chosen size of the university. A larger positive correlation between parents income and childs ability leads to a larger university populated by a larger fraction of rich students, in line with the so-called participation gap. Our results are robust to the introduction of private schooling alternatives, financed with fees. |
| Keywords: | majority voting, ends-against-the-middle, non single-peaked preferences, non single-crossing preferences, higher education participation gap, income ability correlation, size of university |
| JEL: | D72 I22 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29365&r=pol |
| By: | Cremer, Helmuth; Roeder, Kerstin |
| Abstract: | This paper studies the political economy of a basic income (BI) versus a means tested welfare scheme. We show in a very simple setting that if society votes on the type of system, its generosity as well as the “severity” of means testing (if any), a BI system could only emerge in the political equilibrium under very strong and empirically implausible conditions. Instead, the political process leads to a means tested system. The necessity to draw political support does affect the design of the system, but it only implies that means testing becomes less severe so that benefits are extended also to themiddle classes. However, a fully universal system is rejected by a majority. |
| Keywords: | Basic income, Means testing, Political support |
| JEL: | D3 D7 H2 H5 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29485&r=pol |