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on Regulation |
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Issue of 2006‒06‒24
five papers chosen by Christian Calmes Universite du Quebec en Outaouais, Canada |
| By: | AURAY, Stéphane; MARIOTTI, Thomas; MOIZEAU, Fabien |
| JEL: | D82 L15 L51 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:5510&r=reg |
| By: | John Bennett (Brunel University); Saul Estrin (London Business School and IZA Bonn) |
| Abstract: | We address the impact of corruption in a developing economy in the context of an empirically relevant hold-up problem - when a foreign firm sinks an investment to provide infrastructure services. We focus on the structure of the economy’s bureaucracy, which can be centralized or decentralized, and characterize the ‘corruptibility’ of bureaucrats in each case. Results are explained in terms of the non-internalization, under decentralization, of the ‘bribe externality’ and the ‘price externality.’ In welfare terms, decentralization is favoured, relatively speaking, if the tax system is less inefficient, funding is less tight, bureaucrats are less venal, or compensation for expropriation is ungenerous. |
| Keywords: | corruption, bureaucratic structure, developing economy |
| JEL: | D73 H11 H77 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2156&r=reg |
| By: | L. Randall Wray |
| Abstract: | Even as the United States enjoys an economic expansion, there is an undercurrent of concern among economic analysts who follow financial markets. Some feel that the expansion of the credit derivatives markets poses the threat of a crisis similar to the Long-Term Capital Management debacle of 1998. Credit derivatives allow banks to share risks with holders of the derivatives, which are often mutual funds and other nonbank financial institutions. The Basel II accord, now being implemented in many countries, is hailed as a good form of protection against the risk of a series of bank failures of the type that might cause problems in the derivatives markets. Basel II represents a more sophisticated and complex version of the original Basel Accord of 1992, which set minimum capital ratios for various types of bank assets. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_84&r=reg |
| By: | Raymond Fisman; Edward Miguel |
| Abstract: | Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood. To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone. This generates a revealed preference measure of government officials' corruption based on real-world behavior taking place in the same setting. We find strong persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time. In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing non-laboratory evidence on sentiment in economic decision-making. Taken together, factors other than legal enforcement appear to be important determinants of corruption. |
| JEL: | K42 Z13 D73 P48 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12312&r=reg |
| By: | David Abler; John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); David Blandford; Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | We analyze the potential impact of continuing the existing U.S. sugar program, replacing it with a standard program, and implementing the standard program with multilateral trade liberalization. Under the North American Free Trade Agreement (NAFTA), duty-free sugar imports from Mexico will undermine the program's ability to operate on a "no-cost" basis to U.S. taxpayers. As the Mexican beverage industry is likely to expand considerably its high-fructose corn syrup use, the sugar thereby displaced will seek a market in the United States. Under these conditions, marketing allotments could not be utilized under current legislation and prices would likely fall to the loan rate. The government would accumulate significant sugar stocks. The replacement of the current sugar program by one similar to other major U.S. crop programs would solve the problem of stock accumulation and accommodate further trade liberalization under a new World Trade Organization (WTO) agreement or future bilateral trade agreements. Our analysis of recent WTO proposals suggests that a WTO agreement is unlikely to impose significant adjustment pressures on the U.S. sugar market beyond those created by NAFTA. The adoption of a standard program would make it easier for the United States to meet its commitments under a new WTO agreement in terms of reductions in trade-distorting amber-box support. Moving to a standard program would increase the costs of the program for taxpayers but would lower costs for sugar users. Given reasonable assumptions about program parameters, the principal program cost would likely be through direct payments rather than through countercyclical or loan-deficiency payments. These costs could be lower than the maximum estimated here, because of limitations on payments to individual producers. |
| Keywords: | DOHA, NAFTA, POLICY, SUGAR, U.S. SUGAR PROGRAM. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:06-wp424&r=reg |