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on Regulation |
| By: | Fabio Schiantarelli (Boston College) |
| Abstract: | The main purpose of this paper is to provide a critical overview of the recent empirical contributions that use cross country data to study the effect of product market regulation and reform on a country's macroeconomic performance. After a brief review of the theoretical literature and of relevant micro-econometric evidence, the paper discusses the main data and methodological issues related to empirical work on this topic. It then critically evaluates the cross country evidence on the effect of product market regulation on mark-ups, firm dynamics, investment, employment, innovation productivity, and output growth. A summary of what we learn from the econometric results concludes the paper. |
| Keywords: | Regulation, Product Market, Performance, Productivity, Innovation, Growth |
| JEL: | D24 K20 L10 L51 O31 O40 O57 |
| Date: | 2005–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:623&r=reg |
| By: | Tony Prosser; Pat O'Malley; Colin Scott; Morag McDermont; Peter Vincent-Jones; Mike Feintuck; Dave Cowan |
| Keywords: | public services; private sector; economic incentives; regulation; contractualisation |
| JEL: | K10 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:05/129&r=reg |
| By: | Toke Aidt; Jaysari Dutta; Vania Sena |
| Abstract: | We study the joint determination of corruption and economic growth. Our model can generate multiple equilibria when complementarity between corruption and growth is sufficiently strong. Our estimates of the impact of corruption on growth take into account that corruption is endogenous and that there may exist different growth/corruption regimes. In a cross section of countries in the 1990s,we identify two regimes, conditional on the quality of political institutions. In the regime with high quality political institutions, corruption has a negative impact on growth. In the regime with low quality institutions, corruption has, overall, little impact on growth, but, if anything, the impact is, surprisingly, positive. |
| Keywords: | Growth; corruption; threshold effects; governance; democracy; corruption. |
| JEL: | D72 D82 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0540&r=reg |
| By: | Mark Furletti; Stephen Smith |
| Abstract: | Summary: This is the first in a series of three papers that examines the protections available to users of various electronic payment vehicles who fall victim to fraud, discover an error on their statement, or have a dispute with a merchant after making a purchase. Specifically, it examines in detail the federal and state laws that protect consumers in the three situations described above as well as the relevant association, network, and bank policies that may apply. The protection information included in this paper is derived from a wide range of public and non-public sources, including federal and state statutes, consumer-issuer contracts, and interviews with scores of payments industry experts. This first paper focuses on the two most widely used electronic payment methods: credit cards and debit cards. The second paper in the series will examine two newer electronic payment vehicles: ACH debits and prepaid cards. The third paper will discuss the broader industry and policy implications of the authors’ findings. |
| Keywords: | Regulation E: Electronic Fund Transfers ; Regulation Z: Truth in Lending ; Consumer protection ; Fraud |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpdp:05-01&r=reg |
| By: | Dahlberg, Matz (Department of Economics); Gustavsson, Magnus (Department of Economics) |
| Abstract: | Earlier studies on income inequality and crime have typically used total income or total earnings. However, it is quite likely that it is changes in permanent rather than in transitory income that affects crime rates. The purpose of this paper is therefore to disentangle the two effects by, first, estimating region-specific inequality in permanent and transitory income and, second, estimating crime equations with the two separate income components as explanatory variables. The results indicate that it is important to separate the two effects; while an increase in the inequality in permanent income yields a positive and significant effect on total crimes and three different property crimes, an increase in the inequality in transitory income has no significant effect on any type of crime. Using a traditional, aggregate, measure of income yields mainly insignificant effects on crime. |
| Keywords: | Crime; Earnings dynamics; Inequality |
| JEL: | C33 D31 J39 K40 |
| Date: | 2005–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2005_020&r=reg |
| By: | Stefan Voigt |
| Abstract: | In economics, there is currently an important discussion on the role of "legal origins" or "legal families". Some economists claim that legal origins play a crucial role until today. Usually, they distinguish between Common Law, French, Scandinavian and German legal origin. When these legal origins are compared, countries belonging to the Common Law tradition regularly come out best (with regard to many different dimensions) and countries belonging to the French legal origin worst. International arbitration provides an ideal "natural experiment" to test this view empirically: in international trade, the contracting parties are free to choose the substantive law that suits their interests best. If the literature just cited was correct, we would expect that rational traders would structure their interactions according to some substantive law based on the Common Law tradition such as British or US American law. Although exact statistics are not readily available, the evidence from cases that end up with international arbitration courts (such as the International Court of Arbitration run by the International Chamber of Commerce in Paris) clearly demonstrates that this is not the case. |
| Keywords: | Legal Origins, International Arbitration, Choice of Substantive Law |
| JEL: | F23 K12 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpicer:21-2005&r=reg |
| By: | James E. Alt (Department of Government, Harvard University); David Dreyer Lassen (Department of Economics, University of Denmark) |
| Abstract: | The paper investigates the effects of checks and balances on corruption. Within a presidential system, effective separation of powers is achieved under divided government, with the executive and legislative branches being controlled by different political parties. When government is unified, no effective separation exists even within a presidential system, but, we argue, can be partially restored by having an accountable judiciary. Our empirical findings show that divided government and elected, rather than appointed, state supreme court judges are associated with lower corruption and, furthermore, that the effect of an accountable judiciary is stronger under unified government, where government cannot control itself. The effect of an accountable judiciary seems to be driven primarily by judges chosen through direct elections, rather than those exposed to a retention vote following appointment. |
| Keywords: | separation of powers; corruption; rent seeking; checks and balances; political institutions; judicial independence; rule of law |
| JEL: | D72 D73 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:05-12&r=reg |
| By: | K Blackburn; G Forgues-Puccio |
| Abstract: | This paper presents a dynamic general equilibrium analysis of public sector corruption and economic growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are charged with the responsibility for procuring public goods which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriate public funds by misinforming the government about the cost and quality of public goods provision. The incentive for each bureaucrat to do this depends on economy-wide outcomes which, in turn, depend on the behaviour of all bureaucrats. We establish the existence of multiple development regimes, together with the possibility of multiple, frequency-dependent equilibria. The predictions of our analysis accord strongly with recent empirical evidence on the causes and consequences of corruption in public office.We study the effect of international financial integration on economic development when the quality of governance may be compromised by corruption. Our analysis is based on a dynamic general equilibrium model of a small economy in which growth is driven by capital accumulation and public policy is administered by government appointed bureaucrats. Corruption may arise due to the opportunity for bureaucrats to embezzle public funds, an opportunity that is made more attractive by financial liberalisation which, at the same time, raises efficiency in capital production. Our main results may be summarised as follows: (1) corruption is always bad for economic development, but its e¤ect is worse if the economy is open than if it is closed; (2) the incidence of corruption may, itself, be affected by both the development and openness of the economy; (3) financial liberalisation is good for development when governance is good, but may be bad for development when governance is bad; and (4) corruption and poverty may co-exist as permanent, rather than just transitory, fixtures of an economy. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:54&r=reg |
| By: | Christian Bessy (IDHE - Institutions et Dynamique de l'Histoire Economique - http://www.idhe.ens-cachan.fr - CNRS : UMR8533) |
| Abstract: | From the construction of a French data base of 309 employment contracts, we analyse current practices in firms, their manpower management methods and their use of the law in the drafting of employment contracts. We present a typology of ‘employment contracts' based on different indicators characterising the terms of the employment relationship (flexibility, employee's subordination to the firm, employee's individual accountability, appropriation of immaterial asserts) Our observations show that the contractual framework and the legal guarantees that it offers are still used relatively infrequently and concern certain types of employment relationship. In conclusion, we give some insights on the French reforms concerning labour contract legislation. |
| Keywords: | labour legislation; employment contract; employee's subordination; individual accountability; flexibility |
| Date: | 2005–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00004762_v1&r=reg |
| By: | Giacomo Calzolari (Department of Economics, University of Bologna); Gyöngyi Lóránth (London Business School) |
| Abstract: | This paper examines prudential regulation of a multinational bank (MNB hereafter) and shows how regulatory intervention depends on the liability structure and insurance arrangements for non local depositors (i.e. on the representation form for foreign units). Shared liability among the MNB’s units gives higher incentives for regulatory intervention than when units are legally separate entities. Cross-border deposit insurance provides lower incentives to intervene than when the regulator only has to compensate local depositors. We study the impact of shared liability and deposit insurance arrangements on regulators’ incentives to monitor and acquire information on MNB’s activities. Furthermore, by describing regulatory intervention and monitoring we also draw implications on the MNB’s preferences over the form representation for foreign units, and discuss the effects of regulators’ behavior on both MNB’s lobbying and international resources shifting. |
| Keywords: | Multinational Banks, Prudential Regulation, Representation Form, Subsidiary, Branch |
| JEL: | L51 F23 G21 G28 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050431&r=reg |