nep-reg New Economics Papers
on Regulation
Issue of 2008‒05‒10
five papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. Corruption and regulatory burden By Dzhumashev, Ratbek
  2. Funding Regulations and Risk Sharing By Colin Pugh; Juan Yermo
  3. Product Market Competition, Regulation and Dividend Payout Policy of Malaysian Banks By Ameer, Rashid/R
  4. On the Impact of Digital Technologies on Corruption: Evidence from U.S. States and Across Countries By Thomas Barnebeck Andersen; Jeanet Bentzen; Carl-Johan Dalgaard; Pablo Selaya
  5. Economic Impacts of Fall Commercial Nutrient Regulation By Otto, Daniel

  1. By: Dzhumashev, Ratbek
    Abstract: It is known that government has discretionary power in providing public goods and regulating the economy. Corrupt bureaucracy with discretionary power creates and extracts rents by manipulating with the public good supply and regulations: i) by attaching excessive red tape to the public good they are providing; ii) or by making the regulations di±cult for the private agents to comply with. The former type of corruption results in less public input being provided at higher cost to the private agents. The latter increases non-compliance, which then breeds bribery. Consequently, the overall public sector burden is higher in the environment with corrupt bureaucracy. We show this outcome using a simple theoretical model, and then confront it with empirical evidence.
    Keywords: corruption; regulatory burden
    JEL: D73 L51 H41 D02 H23
    Date: 2008–05–05
  2. By: Colin Pugh; Juan Yermo
    Abstract: This paper provides a description of the risk-sharing features of pension plan design in selected OECD and non-OECD countries and how they correspond with the funding rules applied to pension funds. In addition to leading to a better understanding of differences in funding rules across countries with developed pension fund systems, the study considers the trend towards risk-based regulation. While the document does not enter the debate over the application of risk-based quantitative funding requirements to pension funds (as under Basel II or Solvency II), it identifies the risk factors that should be evaluated and considered in a comprehensive risk-based regulatory approach, whether prescriptive or principles-based. The three main risk factors identified are the nature of risks and the guarantees offered under different plans designs, the extent to which benefits are conditional and can be adjusted, and the extent to which contributions may be raised to cover any funding gap. In addition, the strength of the guarantee or covenant from the sponsoring employer(s) and of insolvency guarantee arrangements should be carefully assessed when designing funding requirements. <P>Réglementation de la capitalisation et partage des risques <BR>Ce document décrit les caractéristiques de la conception des plans de retraite dans un certain nombre de pays appartenant ou non à l‘OCDE en se plaçant sous l‘angle du partage des risques. Il vérifie en outre si ces caractéristiques correspondent aux règles de capitalisation applicables aux fonds de pension. Au-delà de sa contribution à la connaissance des différences entre les règles de capitalisation dans les pays dotés de systèmes développés de fonds de pension, l‘étude examine la tendance à l‘adoption de règles fondées sur les risques. Même si le document n‘entre pas dans le débat sur l‘application de normes quantitatives de capitalisation en fonction des risques (comme le font Bâle II ou Solvabilité II), il identifie les facteurs de risques qui doivent être évalués et examinés dans le cadre d‘une démarche globale de la réglementation fondée sur les risques, que cette démarche soit prescriptive ou qu‘elle repose sur des principes. Les trois principaux facteurs de risques identifiés sont la nature des risques et les garanties proposées par les différents concepts de plans, la conditionnalité et les possibilités d‘ajustement des prestations, et les possibilités de relèvement des cotisations en cas de capitalisation insuffisante. En outre, il convient d‘évaluer soigneusement la solidité de la garantie ou des engagements relevant de la responsabilité du ou des employeurs à l‘initiative du plan lors de la mise au point des conditions de capitalisation.
    Keywords: pension fund, fond de pension, funding, defined benefit, prestation définie, fair value, juste valeur
    JEL: G23 J32
    Date: 2008–04
  3. By: Ameer, Rashid/R
    Abstract: This paper investigates the impact of the product market competition, regulations on the dividend policies of We find significant differences in the payout of the banks categorized as selling a non-interest based banking products and mix of both interest and non-interest based banking products. We find that the decision to increase dividends is significantly related to earnings, and the decision to cut dividend is significantly related to the changes in the non-performing loans, corporate and real estate sectors loans ratio and earnings loses. Research findings have implication for the regulators of the banks. The research provides a clear link between banks' portfolio choice and earnings that have implications for the dividends in the emerging markets.
    Keywords: Dividends; Banks; Non-performing loans; Ordered Probit Model; Malaysia
    JEL: D21
    Date: 2007
  4. By: Thomas Barnebeck Andersen (Department of Economics, University of Copenhagen); Jeanet Bentzen (Department of Economics, University of Copenhagen); Carl-Johan Dalgaard (Department of Economics, University of Copenhagen); Pablo Selaya (Department of Economics, University of Copenhagen)
    Abstract: We hypothesize that the spread of the Internet has reduced corruption, chiefly through two mechanisms. First, the Internet facilitates the dissemination of information about corrupt behavior, which raises the detection risks to shady bureaucrats and politicians. Second, the Internet has reduced the interface between bureaucrats and the public. Using cross-country data and data for the U.S. states, we test this hypothesis. Data spans the period during which the Internet has been in operation. In order to address the potential endogeneity problem, we develop a novel identification strategy for Internet diffusion. Digital equipment is highly sensitive to power disruption: it leads to equipment failure and damage. Even very short disruptions (less than 1/60th of a second) can have such consequences. Accordingly, more frequent power failures will increase the user cost of IT capital; either directly, through depreciation, or indirectly, through the costs of protective devises. Ceteris paribus, we expect that higher IT user costs will lower the speed of Internet diffusion. A natural phenomenon which causes a major part of annual power disruptions globally is lightning activity. Lightning therefore provides exogenous variation in the user cost of IT capital. Based on global satellite data from the U.S. National Aeronautics and Space Administration (NASA), we construct lightning density data for a large cross section of countries and for the U.S. states. We demonstrate that the lightning density variable is a strong instrument for changes in Internet penetration; and we proceed to show that the spread of the Internet has reduced the extent of corruption across the globe and across the U.S. The size of the impact is economically and statistically significant.
    Keywords: public corruption; internet; information
    JEL: K4 O1 H0
    Date: 2008–04
  5. By: Otto, Daniel
    Abstract: Concern that nutrient (nitrogen (N) and phosphorus (P)) runoff are seriously contributing to hypoxia in the Gulf of Mexico has led some environmental groups to call for the banning of fall fertilizer applications; especially fall anhydrous ammonia. However, restricting fertilizer application to only the spring season has agronomic as well as economic implications for farmers in the Midwest.
    Date: 2008–05–01

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