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on Regulation |
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Issue of 2006‒10‒14
eight papers chosen by Christian Calmes Universite du Quebec en Outaouais, Canada |
| By: | Friedrich Schneider |
| Abstract: | Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of “official” GDP) in 2002/03 in 96 developing countries is 38.7%, in 25 transition countries 40.1%, in 21 OECD countries 16.3% and in 3 Communist countries 22.3%. An increased burden of taxation and social security contributions, combined with labor market regulation, are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high-income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated. |
| Keywords: | shadow economy of 145 countries, tax burden, tax moral, quality of state institutions, regulation, DYMIMIC and other estimation methods |
| JEL: | D78 H11 H20 H26 O17 O50 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1806&r=reg |
| By: | Maite Martínez-Granado (Universidad del País Vasco / The University of the Basque Country); Georges Siotis (Universidad Carlos III de Madrid) |
| Abstract: | A number of European countries, among which the UK and Spain, have opened up their Directory Enquiry Services (DQs, or 118AB) market to competition. We analyse the Spanish case, where both local and foreign firms challenged the incumbent as of April 2003. We argue that the incumbent had the ability to abuse its dominant position, and that it was a perfectly rational strategy. In short,the incumbent raised its rivals' costs directly by providing an inferior quality version of the (essential) input, namely the incumbent's subscribers' database. We illustrate how it is possible to quantify the effect of abuse in situation were the entrant has no previous history in the market. To do this, we use the UK experience to construct the relevant counterfactual, that is the "but for abuse" scenario. After controlling for relative prices and advertising intensity, we find that one of the foreign entrants achieved a Spanish market share of only half of what it would have been in the absence of abuse. |
| Keywords: | Competition policy; abuse of dominance; telecommunications. |
| JEL: | L41 C22 L96 |
| Date: | 2006–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:dfaeii:200602&r=reg |
| By: | Brian S. Armour; M. Melinda Pitts |
| Abstract: | While the health risks associated with smoking are well known, the impact on income distributions is not. This paper extends the literature by examining the distributional effects of a behavioral choice, in this case smoking, on net marginal Social Security tax rates (NMSSTR). The results show that smokers, as a result of shorter life expectancies, incur a higher NMSSTR than nonsmokers. In addition, as low-earnings workers have a higher smoking prevalence than high-earnings workers, smoking works to widen the income distribution. This higher tax rate could have implications for both labor supply behavior and Social Security system funding. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2006-12&r=reg |
| By: | Gruère, Guillaume P. |
| Abstract: | "This paper reviews current trade–related regulations of genetically modified (GM) food and discusses their effects on developing countries. There is a large heterogeneity in current import approval and marketing policies of GM food worldwide. At the international level, the harmonization efforts are led by the Codex Alimentarius Commission, the Cartagena Protocol on Biosafety and the World Trade Organization. While internationally harmonized guidelines for safety approval have been finalized, we show that there is no clear consensus on labeling regulations for GM food, and there is an increasing risk of conflicts among international agreements. We analyze the GM food regulations of two large rich importers, Japan and the European Union (EU) and discuss their differences and their potential impact on international trade. We also show that the effects of international and domestic trade related regulations critically depend on the type of traded products and their intended use: food and unprocessed products are subject to more stringent regulations than animal feed and processed products. Finally, we identify the main spillover effects of national and international regulations on developing countries' policy making, and suggest four policy arrangements on GM food to enable developing countries to satisfy production, consumption, international trade, and risk management objectives simultaneously while complying with their international obligations. |
| Keywords: | Genetically modified food Developing countries, Biosafety, Trade regulation, Labeling, International trade, Tariff, |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:eptddp:147&r=reg |
| By: | Nenova, Tatiana |
| Abstract: | The issue of " an appropriate " legal framework, especially in the case of the takeover market, has been poorly studied in the case of emerging markets, yet it is of immediate relevance and practical policymaker interest. The study makes a first attempt to analyze takeover regulations in a comparative context across 50 countries. It proposes a methodology to create a detailed index on the most salient features of capital market laws, and illustrates the approach on the case of takeover legislation. The methodology allows better understanding of the impact of laws on markets and development, allows a detailed quantification of a given regulation, in this case takeover market rules, and helps determine relevant policy implications. Specifically, the framework permits the exploration of the effects of individual regulations, their substitutability and interplay, as well as the overall extent of friendliness of the laws to investors, or particular groups thereof (such as minority shareholders), and the links of specialized regulation with the overall legal system. Finally, the study explores the effect of the investor-friendliness of takeover laws on stock market development. |
| Keywords: | Corporate Law,Economic Theory & Research,Investment and Investment Climate,Markets and Market Access,Small Scale Enterprise |
| Date: | 2006–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4029&r=reg |
| By: | Peter T. Leeson (Department of Economics, West Virginia University); Russell S. Sobel (Department of Economics, West Virginia University) |
| Abstract: | Could bad weather be responsible for U.S. corruption? This paper argues that natural disasters create resource windfalls in the states they strike by triggering federally-provided natural disaster relief. Consistent with the theory that natural resource and foreign aid windfalls increase public corruption, disaster relief windfalls likely do as well. We investigate this hypothesis by exploring the effect of FEMA-provided disaster relief on public corruption. The results support our hypothesis. Each additional $1 per capita in average annual FEMA relief increases corruption nearly 2.5 percent in the average state. Eliminating FEMA disaster relief would reduce corruption more than 20 percent in the average state. Our findings suggest that notoriously corrupt regions of the United States, such as the Gulf Coast, are notoriously corrupt because natural disasters frequently strike them. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:06-07&r=reg |
| By: | Yinhua Mai |
| Abstract: | In this paper, I use the Monash Multi-Country (MMC) model - a dynamic CGE model of China, Australia and the Rest of the World - to analyse the effects of removing border protection on wheat and rice in China. The analysis points to the possibility that removing border protection on wheat and rice may lead to an increase in rural income in China. This is due mainly to the following two factors. First, while removing border protection on wheat and rice leads to a contraction in agricultural activities, it also leads to an expansion in manufacturing and services activities. Second, on average, rural households in China obtain over half of their income from manufacturing and services activities. |
| Keywords: | China, Wheat and rice, CGE modelling, rural income |
| JEL: | C68 F14 Q17 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-160&r=reg |
| By: | John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); Yakov Ben-Haim (Mechanical Engineering Technion, Israel Institute of Technology) |
| Abstract: | Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between price-based vs. quantity-based environmental regulation under Knightian uncertainty; that is, when uncertainty cannot be modeled with known probability distributions. Under these circumstances, the policy objective cannot be to maximize the expected net benefits of emissions control. Instead, we evaluate an emissions tax and an aggregate abatement standard in terms of maximizing the range of uncertainty under which the welfare loss from error in the estimates of the marginal benefits and costs of emissions control can be limited. The main result of our work is that the same criterion involving the relative slopes of the marginal benefit and cost functions determines whether price-based or quantity-based control is more robust to unstructured uncertainty. Hence, not only does the relative slopes criterion lead to the policy that maximizes the expected net benefits of control under structured uncertainty, it also leads to the policy that maximizes robustness to unstructured uncertainty. |
| Keywords: | emissions control, environmental regulation, info-gap, Knightian uncertainty, robustness, satisficing |
| JEL: | D81 L51 Q58 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2006-1&r=reg |