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on Regulation |
| By: | Jie He (GREDI, Département d'économique, Université de Sherbrooke); Paul MAKDISSI (Departement d’´economique and CEREF, Universite de Sherbrooke, 2550 boulevard de l’Universite, Sherbrooke, Québec, Canada, J1K 2R1); Quentin WODON (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA) |
| Abstract: | We develop two public choice models in which environmental regulation is determined endogenously in the presence of agents who are heterogenous in wealth or income. In the first model, regulation is determined by a majority vote, and an increase in inequality induces an increase in environmental standard. In the second model, the environmental standard is chosen by a corrupt bureaucrat. In that model, while the impact of an increase in inequality on the environmental standard is uncertain, a higher level of corruption always reduces the quality of environmental regulation. An empirical analysis using cross-country data confirms the implication of both models. |
| Keywords: | Environmental regulation, corruption, inequality |
| JEL: | Q56 Q58 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:07-13&r=reg |
| By: | Giuseppe Fiori (Boston College); Giuseppe Nicoletti (OECD); Stefano Scarpetta (OECD and IZA); Fabio Schiantarelli (Boston College and IZA) |
| Abstract: | This paper provides a systematic empirical investigation of the effect of product market liberalization on employment when there are interactions between policies and institutions in product and labor markets. Using panel data for OECD countries over the period 1980-2002, we present evidence that product market deregulation is more effective at the margin when labor market regulation is high. Moreover, there is evidence in our sample that product market deregulation promotes labor market deregulation. We show that these results are mostly consistent with the basic predictions of a standard bargaining model, such as Blanchard and Giavazzi (2003), extended to allow for a richer specification of the fall back position of the union and for taxation. |
| Keywords: | employment, competition, deregulation, liberalization, unions |
| JEL: | J23 J50 L50 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2770&r=reg |
| By: | Gabriel Felbermayr (University of Tübingen); Julien Prat (University of Vienna and IZA) |
| Abstract: | This paper analyzes the effect of Product Market Regulation (PMR) on unemployment in a search model with heterogeneous multiple-worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR related to entry costs and PMR that generates recurrent fixed costs. We find that: (i) higher entry costs raise the rate of unemployment mainly through our novel selection effect, (ii) higher fixed costs lower unemployment through the selection effect and increase it through the competition effect analyzed in Blanchard and Giavazzi (2003). We propose econometric evidence consistent with the unemployment effects of sunk versus recurring costs. |
| Keywords: | product market regulation, unemployment, search model, firms heterogeneity |
| JEL: | E24 J63 L16 O00 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2754&r=reg |
| By: | Annette Kirstein; Roland Kirstein (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | In this paper we experimentally test a theory of boundedly rational behavior in a "lemons" market. We analyze two different market designs, for which perfect rationality implies complete and partial market collapse, respectively. Our empirical observations deviate substantially from the predictions of rational choice theory: Even after 20 repetitions, the actual outcome is closer to efficiency than expected. We examine to which extent the theory of iterated reasoning contributes to the explanation of these observations. Perfectly rational behavior requires a player to perform an infinite number of iterative reasoning steps. Boundedly rational players, however, carry out only a limited number of such iterations. We have determined the iteration type of the players independently from their market behavior. A significant correlation exists between the iteration types and the observed price offers. |
| Keywords: | bounded rationality, market failure, adverse selection, regulatory failure, paternalistic regulation |
| JEL: | D8 C7 B4 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:07014&r=reg |
| By: | Francesc Trillas (Grup de Recerca en Federalisme Fiscal i Economia Regional (Institut d'Economia de Barcelona-IEB), Departament d'Economia i Història Econòmica, Universitat Autònoma de Barcelona); Daniel Montolio (Grup de Recerca en Federalisme Fiscal i Economia Regional (Institut d'Economia de Barcelona-IEB), Departament d'Hisenda Pública, Universitat de Barcelona); Néstor Duch (Grup de Recerca en Federalisme Fiscal i Economia Regional (Institut d'Economia de Barcelona-IEB), Departament d'Econometria, Estadística i Economia Espanyola, Universitat de Barcelona) |
| Abstract: | Measuring productive efficiency provides information on the likely effects of regulatory reform. We present a Data Envelopment Analysis (DEA) of a sample of 38 vehicle inspection units under a concession regime, between the years 2000 and 2004. The differences in efficiency scores show the potential technical efficiency benefit of introducing some form of incentive regulation or of progressing towards liberalization. We also compute scale efficiency scores, showing that only units in territories with very low population density operate at a sub-optimal scale. Among those that operate at an optimal scale, there are significant differences in size; the largest ones operate in territories with the highest population density. This suggests that the introduction of new units in the most densely populated territories (a likely effect of some form of liberalization) would not be detrimental in terms of scale efficiency. We also find that inspection units belonging to a large, diversified firm show higher technical efficiency, reflecting economies of scale or scope at the firm level. Finally, we show that between 2002 and 2004, a period of high regulatory uncertainty in the sample’s region, technical change was almost zero. Regulatory reform should take due account of scale and diversification effects, while at the same time avoiding regulatory uncertainty. |
| Keywords: | Productive Efficiency, Regulatory Reform, Vehicle Inspections. |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:creap2006-02&r=reg |
| By: | Tantuico, Delia S.; Zshornack, Errol Wilfred |
| Abstract: | Intellectual property rights-–copyrights, trademarks, patents, trade secrets, and related rights-–have become increasingly important with the advent of increased international trade, global and knowledge-based economy and fast developing technology. A strong intellectual property rights regime is necessary in order to attract foreign trade and direct investments. For this reason, the protection of intellectual property rights has become an important negotiating item in all FTAs which the United States has entered into. In view of the proposed RP-US FTA negotiations, this paper seeks to determine whether the existing intellectual property regime in the Philippines provides adequate and sufficient legal protection of intellectual property rights. It also seeks to determine whether the administrative and judicial processes are adequate and speedy and acceptable in the enforcement and protection of said rights in the light of FTAs already entered into by the United States with other countries, in general, and with Singapore, in particular, which will be the benchmark for the RP-US FTA. Other relevant issues in the protection of intellectual property rights such as the annual review of ountries by the United States Trade Representative in relation to Special 301 of the U.S. Trade Law; piracy of optical media, including books and pharmaceuticals; and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) are also discussed. The author proposes certain provisions to be added to the Intellectual Property Code; sustained, consistent and stricter implementation of intellectual property laws including more efforts at curbing piracy; and more importantly, a strong political will and a strong determination to strengthen intellectual property rights, as necessary to make the IPR regime up to par with U.S. and international. |
| Keywords: | World Trade Organization, investment, intellectual property rights, market access, free trade agreement (FTA), trade-related aspects of intellectual property rights (TRIPS), dispute settlement, Optical Media Act, E-commerce Law, legal protection, capability building |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2006-12&r=reg |
| By: | Kristopher Gerardi (Federal Reserve Bank of Boston); Harvey S. Rosen (Princeton University); Paul Willen (Federal Reserve Bank of Boston) |
| Abstract: | The U.S. mortgage market has experienced phenomenal change over the last 35 years. Most observers believe that the deregulation of the banking industry and financial markets generally has played an important part in this transformation. This paper develops and implements a technique for assessing the impact of changes in the mortgage market on individuals and households. Our analysis is based on an implication of the permanent income hypothesis: that the higher a household’s future income, the more it desires to spend and consume, ceteris paribus. If we have perfect credit markets, then desired consumption matches actual consumption and current spending on housing should forecast future income. Since credit market imperfections mute this effect, we can view the strength of the relationship between housing spending and future income as a measure of the “imperfectness” of mortgage markets. Thus, a natural way to determine whether mortgage market developments have actually helped households by decreasing market imperfections is to see whether this link has strengthened over time. We implement this framework using panel data going back to 1969. We find that over the past several decades, housing markets have become less imperfect in the sense that households are now more able to buy homes whose values are consistent with their long-term income prospects. One issue that has received particular attention is the role that the housing Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, have played in improving the market for housing finance. We find no evidence that the GSEs’ activities have contributed to this phenomenon. This is true whether we look at all homebuyers, or at subsamples of the population whom we might expect to benefit particularly from GSE activity, such as lowincome households and first-time homebuyers. |
| JEL: | D14 G21 R21 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:141rosen&r=reg |
| By: | Benno Torgler (Queensland University of Technology) |
| Abstract: | The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN. |
| Keywords: | International Organizations, United Nations, International Trust, Political Trust, Social Trust, Corruption, Globalization |
| JEL: | Z13 D73 O19 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.45&r=reg |
| By: | Avinash Dixit (Princeton University) |
| Abstract: | In any non-trivial state, policies decided at the top levels of government are administered by middle-level bureaucrats. I examine whether this agency problem can contribute to explaining state failure in matters of provision of public goods. I find some theoretical arguments to support the view that failure is more likely in states whose top rulers have predatory motives. When the bureaucrats’ cost of providing the public good is their private information, rulers must give them incentive rents to achieve truthful revelation. Predatory rulers are less willing to part with such rents; therefore they tolerate more downward distortion in the provision of public goods to reduce the required rent-sharing. When the bureaucrats’ actions are also unobservable, there is a synergistic interaction between more benevolent rulers and more caring or professional bureaucrats. However, these effects manifest themselves differently and to different degrees under different conditions of information. Therefore precise explanations or predictions in individual instances require context-specific analyses. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:131dixit&r=reg |
| By: | Mattlin, Mikael (BOFIT) |
| Abstract: | This paper reviews recent regulatory and policy changes that affect the Chinese central government's ownership and authority over the capital allocations of strategic state-owned enterprises (SOE). The paper examines the reform of the central government's relationship with key SOEs as a consequence of the establishment of the State Assets Supervision and Administration Commission of the State Council (SASAC) in 2003, the coming introduction of a centralised operating and budgeting system for SOEs, and the government's ongoing re-evaluation of its ownership policy. SASAC appears to have the potential to develop into a major actor in China's domestic capital allocation, with an active role in strategic financing and restructuring of key sectors of the Chinese economy. The data reviewed for this paper strongly suggests that the Chinese central government aims to retain significant ownership control over key SOEs and, by extension, over a major part of the domestic economy. The new operating and budgeting system is set to significantly enhance central government control over SOEs' capital allocation. |
| Keywords: | state-owned enterprises; privatisation; corporate governance; China |
| JEL: | G32 G38 P26 P31 |
| Date: | 2007–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2007_010&r=reg |
| By: | Marie-Hélène Massot (LVMT - Laboratoire Ville, Mobilité, Transports - [INRETS] - [Université de Marne la Vallée] - [Ecole Nationale des Ponts et Chaussées]); Jimmy Armoogun (DEST - Département Economie et Sociologie des Transports - [INRETS]); Patrick Bonnel (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); David Caubel (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]) |
| Abstract: | Improvements in individual mobility conditions for drivers in the Paris conurbation (higher speed and lower cost of individual mobility) have contributed to the reduction of urban areas density and have led to dominant use of the car and a dramatic reduction in walking and cycling, while the use of public transport has remained roughly constant. The car now highly dominated the other transport modes in many places including the Paris metropolitan area. As a consequence of a car domination, a great part of the public opinion claims a reduction of a car use and the development of alternative forms of transport. The aim of this study is to determine whether those claims are consistent with the actual present car traffic speeds. More precisely, our aim was to try to answer some questions: have car drivers a good appreciation of a car speed performance? How many are car's drivers who could save time by using other modes of transport? What can be expected from a drastic growth of the public transport supply and/or from a reduction of the car speed in order to reduce the car usage and consequently the car traffic flows. This paper presents our methodology and the major results obtained through numerical simulation based on Paris and Lyon conurbations figures. |
| Keywords: | Individual daily mobility ; Modal transfer ; Transport modelling ; Traffic management ; Traffic simulation ; car use restriction ; public transport |
| Date: | 2007–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00096744_v1&r=reg |
| By: | Leandro, Cerutti |
| Abstract: | To beginning of 2002, the Argentine government declares the emergency economic, financier, exchange and social by means of sanction ofe Law N. 25.561 and respect to do makes abandonment of the convertibility of the local currency American, facing strong devaluation of weight. As of this moment the State actively took part in readaption of the electric system to the new social economic conditions a new norm and concrete actions. In this context the Secretary of Energy implement an important number of Resolutions that affected of different ways from the effective regulatory frame and with important effects on the associated bottoms to maintain the correct operation of Wholesale Market. The objective of this work is to analyze the impact on the sector of such resolutions, being examined the main modifications that were introduced within the framework regulatory of the electric market from devaluation in the bottoms destined to facilitate the operating one of the market, and in the structure behavior that to the sector prior to a 2002, mainly in the referred thing to the sector of generation previous to the crisis. With respect to this segment is the prices that receive the generators, adopted post-devaluaci?que has granted in order to give them continuity to the service. The perspective of the sector in the long term considering the present problems of supplying of gas and before changes in the macroeconomics conditions. In which investigation talks about to the approach of this? Have to be divided of a putting for he caracteristics of the operation of the Argentine system within the new regulatory organizational institucional and, to the light of a paradigm sistem in which the market is in relation with other systems of provision of energy. East paradigm has been chosen because in Argentina the elmarket presents/displays forts entailments with the market gas?ro, being the gas I ooze m?importante in the generation. Therefore, the problems derived from the gas shortage directly affect evolution of electric market. |
| Keywords: | Argentina; mercado electrico; energia; regulacion; nuevo mercado electrico; nuevo marco regulatorio del sector energetico. |
| JEL: | L52 L51 |
| Date: | 2006–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3094&r=reg |