renegotiations in the greenhouse international climate policies are being shaped in a process of ongoing negotiations this paper develops a sequential game framework to explore the stability of international climate agreements allowing for multiple renegotiations we analyse how the incentives to reach an international climate agreement in the first period will be impacted by the prospect of further negotiations in later periods and by the punishment options related to renegotiations for this purpose we introduce a dynamic model of coalition formation with twelve world regions that captures the key features of the climate economy impacts of greenhouse gas emissions for a model with one round of renegotiations we find that a coalition of china and the united states is the unique renegotiation proof equilibrium in a game with more frequent renegotiations we find that the possibility to punish defecting players helps to stabilise larger coalitions in early stages of the game consequently several renegotiation proof equilibria emerge that outperform the coalition of china and usa in terms of abatement levels and global payoff the grand coalition however is unstable

transfers to sustain dynamic core theoretic cooperation in international stock pollutant control international environmental agreements aiming at correcting negative externalities generated by transboundary pollution are difficult to achieve for many reasons important obstacles arise from asymmetry in costs and benefits and instability may occur due to the fact that coalitions of countries may attempt to do better for themselves outside of any proposed agreement in a static context it has already been shown that it is possible to achieve stability in the sense of the core of a co operative game by means of appropriately defined transfers between the countries involved however the transboundary pollution problems that are most important are caused by accumulated pollutants so that a dynamic analysis is required this paper provides a transfer scheme that yields a core property in a dynamic context the possibility of computing such transfers numerically is discussed

privatisation in developing countries a review of the evidence and the policy lessons privatisation is widely promoted as a means of improving economic performance in developing countries however the policy remains controversial and the relative roles of ownership and other structural changes such as competition and regulation in promoting economic performance remain uncertain this article reviews the main empirical evidence on the impact of privatisation on economic performance in developing economies the evidence suggests that if privatisation is to improve performance over the longer term it needs to be complemented by policies that promote competition and effective state regulation and that privatisation works best in developing countries when it is integrated into a broader process of structural reform

short versus long run implications of trade liberalization for poverty in three developing countries the impacts of global trade reform on poverty are a key concern in the current trade negotiations under the doha development agenda the aggregate poverty impacts of trade reform are in turn strongly linked to the impacts of such reforms on the rural population as they constitute the overwhelming majority of the poor in almost all developing countries this paper uses a new micro simulation methodology designed to analyze this critical issue the methodology is first explained and then applied to three developing countries of particular interest chile malawi and vietnam a key feature is the distinction between the short run impacts of reform where many factors most importantly selfemployed labor of the poor tend to be immobile between sectors and the longer run impacts when factors find their highest return regardless of the sector of employment this distinction makes an enormous difference and

international environmental agreements the role of foresight the present paper attempts to bridge the gap between the cooperative and the non cooperative approach employed to examine the size of stable coalitions formed to address global environmental problems we do so by endowing countries with foresightedness that is by endogenizing the reaction of the coalition s members to a deviation by one member we assume that when a country contemplates withdrawing or joining an agreement it takes into account the reactions of other countries ignited by its own actions we identify conditions under which there always exists a unique set of farsighted stable ieas the new farsighted ieas can be much larger than those some of the previous models supported but are not always pareto efficient

environmental policy and stable collusion the case of a dynamic polluting oligopoly we show that the imposition of a markovian tax on emissions that is a tax rate which depends on the pollution stock can induce stable cartelization in an oligopolistic polluting industry this does not hold for a uniform tax thus accounting for the feedback effect that exists within a dynamic framework where pollution is allowed to accumulate into a stock over time changes the result obtained within a static framework moreover the cartel formation can diminish the welfare gain from environmental regulation such that welfare under environmental regulation and collusion of firms lies below that under a laissez faire policy

the role of uncertainty and learning for the success of international climate agreements abstract transnational externalities e g transboundary pollution trade contagious diseases and terrorism warrant coordination and cooperation between governments but this proves often difficult one reason for the meager success is the public good character of many of these economic problems encouraging free riding another reason one might suspect is uncertainty surrounding most environmental problems and in particular climate change this provides often an excuse for remaining inactive paradoxically some recent papers have concluded just the opposite the veil of uncertainty can be conducive to the success of international environmental cooperation in this paper we explain why and under which conditions this can be true however we argue that those conditions are the exception rather than the rule most important we suggest a mechanism for those conditions where learning has a negative effect on the success of cooperation which removes this effect or even turns it into a positive effect our results apply beyond the specifics of climate change to similar problems where cooperation generates positive externalities

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

relative prices and investment rates abstract we construct a panel for the price of aggregate investment over consumption and report the following observations 1 relative price differences across countries are large over the entire sample period and this conclusion is not affected by excluding non tradable consumption goods 2 relative price dispersion has decreased during the sample period 3 relative price changes are not persistent across periods while average price levels are moreover the persistence in relative price levels is higher for countries at low relative prices we show that the relative price of investment is negatively correlated with investment rates in a cross section of countries the standard one sector growth model is a natural framework to study quantitatively the effects of barriers to capital accumulation since there is a very simple mapping between barriers to investment and relative prices in this environment we simulate a calibrated version of the model in which barriers follow a stochastic process common to all countries and estimated using relative price data and obtain statistics for investment rates that closely resemble what we observe in the data in particular the model accounts for 90 of the 1985 gini index of relative investment rates and the decline in investment rate dispersion over time the model has two limitations as a theory of development first it cannot account for the income disparity in the data unless we assume unmeasured capital with barriers affecting the broad measure of capital second even under these extreme assumptions the model cannot account for the evolution of income disparity over time

what have we learned about policy and growth from cross country regressions economists have been seeking to comprehend why some countries are rich and others poor for well over 200 years a better understanding of the national policies associated with long run growth would both contribute to our ability to explain cross country differences in per capita incomes and provide a basis for making policy recommendations that could lead to improvements in human welfare recently economists have used cross country regressions to search for empirical linkages between longrun growth and indicators of national policies e g roger kormendi and philip meguire 1985 robert j barro 1991 the large cross country growth literature has identified various fiscal monetary trade exchange rate and financial policy indicators that are significantly correlated with longrun growth yet levine and david renelt 1992 show that many of these findings are fragile to small alterations in the conditioning information set that is small changes in the right hand side variables produce different conclusions regarding the relationship between individual policies and growth in this paper we take stock of what the profession has learned from cross country regression studies of policy and long run growth i limitations

farsighted coalitional stability abstract i define the largest consistent set a solution concept which applies to situations in which coalitions freely form but cannot make binding contracts act publicly and are fully farsighted in that a coalition considers the possibility that once it acts another coalition might react a third coalition might in turn react and so on without limit i establish weak nonemptiness conditions and apply it to strategic and coalitional form games and majority rule voting i argue that it improves on the von neumann morgenstern stable set as it is usually defined but is consistent with a generalization of the stable set as in the theory of social situations journal of economic literature classification numbers c70 c71

state divestiture as a policy instrument in developing countries abstract reducing the size and role of the public sector in developing countries and emphasizing prices and markets as allocative mechanisms has led to increased privatization measures of which divestiture has been the most common variant the paper examines this experience and indicates that ownership transfer is neither a necessary nor sufficient condition for achieving more efficient use of resources in the design of divestiture the weighting given to enhancing freedom of entry and intensity of competition remains critical at the same time the paper notes the existence of multiple constraints including profitability and capital market limitations that continue to impede the implementation of divestiture measures the conditions for divestiture to be both appropriate and successful are shown to be restrictive

leviathan resists the endogenous relationship between privatization and firm performance using a panel dataset of privatized cement firms in turkey this paper models and finds support for the simultaneous relationship between privatization and firm performance it is found that favorable short run performance weak market potential higher employment lower socio economic development concentrated voter preferences and weaker representation of right wing parties in the firms locality delay the timing of privatization the paper also finds that privatization increases output in the medium term by reducing the labor stock and promoting the adoption of more advanced technology such that production shifts from constant to decreasing returns to scale

privatization fdi inflow and economic growth evidence from china s provinces 1978 2008 china s economic growth over 1978 2008 is a miracle this article attempts to figure out and quantify the factors leading to this miracle it is generally believed that economic reform and opening up is the key to china s economic success but that is far from being exact and specific this study hypothesizes that privatization and foreign direct investment fdi inflow are the two key factors in this process we focus on identifying the exact specific and detailed mechanisms of privatization and fdi inflow in promoting economic growth especially from the provincial level then using a panel data covering 31 provinces of chinese mainland over 1978 2008 we find statistically significant evidence to support our hypotheses we predict that further economic growth depends on further privatization and opening up that is depends on denationalization of the economy

international environmental agreements with mixed strategies and investment abstract we modify a canonical participation game used to study international environmental agreements iea considering both mixed and pure strategies at the participation stage and including a prior cost reducing investment stage the use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result with mixed strategies equilibrium participation and welfare are higher in equilibria that involve higher investment

sharing a fish stock when distribution and harvest costs are density dependent we studied cooperative and competitive solutions for managing a trans boundary fish stock that has a stock size dependent distribution and harvesting costs using norwegian spring spawning nss herring clupea harengus as a case study this is among the first studies to investigate the effect of a dynamic distribution in a partition function game framework i e including externalities the special feature of nss herring is that it comes under the sole ownership of norway when the stock size is sufficiently low the three players in our game are differentiated by stock ownership cost per unit effort and stock elasticity of harvest we find that cost asymmetry improves the likelihood of forming a stable grand coalition as harvesting load can be assigned to each fishing zone according to a player s relative cost level and the density of fish a dynamic distribution increases the bargaining power of norway because of her ability to control both the total stock and the stock shares in different zones especially during the stock transition years however the bargaining power of norway may disappear if her cost of harvesting exceeds that of the other players this loss of bargaining power can take on two forms first a dynamic distribution may encourage a minor player to free ride because norway needing a coalition partner to improve her cost effectiveness would be less inclined to retaliate as retaliation hurts her ally as much as the free rider second in a stable grand coalition norway is not guaranteed to receive an allocation of benefit shares in proportion to not to say in excess of her stock ownership at the current stock condition the strategy where norway reduces stock abundance below the level where the stock becomes non migratory is found attractive only if the discounting rate is sufficiently high

what impact does the choice of formula have on international comparisons in this paper an empirical comparison of a number of alternative multilateral index number formulae is undertaken the magnitude of the effect of choosing one formula over another is ascertained using an appropriate cross sectional data set constructed under the auspices of the eurostat oecd purchasing power parity programme to this end a new indicator is proposed that facilitates the measurement of the difference between two sets of bloc consumption shares each computed using a different multilateral comparison method jel classification c31 c43 c81 e31 f31 o57 quel impact est ce que le choix des formules a sur les comparaisons internationales ce memoire propose une comparaison empirique d un certain nombre de formules de nombres indices multilateraux on tente de jauger la magnitude de l impact du choix d une formule plutot qu une autre en utilisant une base de donnees transversales appropriee construite sous l egide du programme de parite du pouvoir d achat eurostat ocde on propose un nouvel indicateur qui facilite la mesure de la difference entre deux ensembles de patterns de consommation chacun calculea l aide d une methode de comparaison multilaterale differente

structural change and poverty in africa a decomposition anakysis for cote d ivoire abstract this paper provides evidence that economic destabilization and the absence of managed structural change in an economy can be more harmful to the welfare of the poor than the process of adjustment itself evidence comes from four consecutive years of household survey data from cote d ivoire spanning both a period of adjustment and destabilization these constitute a unique data base in africa to assess the impact of structural change on the poor the analytic methodology used is that of static and dynamic decomposition of poverty measures along policy relevant dimensions

productive efficiency of public enterprises a macroeconomic analysis based on cross section estimation of a neoclassical production function over the past decade the role of public enterprise in the economic development process has been a subject of active debate using cross section estimates of a neoclassical production function incorporating vakue addition of the parasatal sector as a variable supplementary to the factors and capital it is shown onthe basis of macroeconomic data for the periods 1970 81and 1970 85 that hypothesis derived fromm the propely rights bureaucracy and x inefficiency cannot be rejected

housing market interventions and mobility an international comparison government interventions in housing markets usually have a strong side effect of lowering residential mobility interventions tend to raise the price of owner occupied dwellings and to lower rents compared with household incomes an index of these two tendencies is calculated for major conurbations of 16 countries among these switzerland south korea sri lanka and the former german democratic republic are of particular interest the rank order correlation of the index with residential mobility appears to be strong 0 962 and with an elasticity of 0 815 three quarters of the variance is explained no correlation was found with the home ownership rate in so far as lower mobility impairs housing welfare market interventions should be avoided but it is recognised that such interventions primarily reflect concern for equity and externalities

dynamic effects on the stability of international environmental agreements abstract in terms of the number of signatories one observes both large and small international environmental agreements the theoretical literature based on game theory discusses different concepts and mechanisms regarding stability of coalitions the conclusion has been reached that in all circumstances under farsightedness both large and small stable coalitions can occur this theory is based on behavioural reaction patterns but does not take account of the interaction with the dynamics of emission adjustments this paper shows that when these two dynamical processes are integrated large and small stable coalitions can still occur but only if the costs of emissions are relatively unimportant as compared with the costs of abatement

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

economic information versus quality variation in cross country data data quality in the penn world tables varies systematically across countries that have different growth rates and are at different stages of economic development thus intro ducing measurement error correlated with variables of economic interest we explore this problem with three examples from the literature showing that the problem appears to be minor in growth convergence regressions but serious in estimating the effect of income volatility on growth and in a cross country lest of the permanent income hypothesis the results suggest at the least a need for performing appropriate sensitivity tests before draw

international fisheries agreements a game theoretical approach this paper surveys the application of game theory to the economic analysis of international fisheries agreements the relevance of this study comes not only from the existence of a vast literature on the topic but especially from the specific features of these agreements the emphasis of the survey is on coalition games an approach that has become prominent in the fisheries economics literature over the last decade it is shown that coalition games were first applied to international fisheries agreements in the late 1990s addressing cooperative issues under the framework of characteristic function games then progressively this cooperative approach was combined with non cooperative elements such as the stability analysis of the agreements finally partition function games which model coalition formation endogenously were introduced and became the standard approach to study the formation and stability of international fisheries agreements a key message that emerges from this literature strand is that self enforcing cooperative management of internationally shared fish stocks is generally difficult to achieve hence the international legal framework and regulations play a decisive role on ensuring cooperation over the use of these resources

the heterogeneity of the consumer s preferences over time a system wide analysis of discrete panel data abstract the paper uses the individual and overall tests of heterogeneity for two complete piglog models of expenditure equations fitted to discrete survey data to investigate a possible change in the consumer s preferences in australia between 1975 76 and 1983 84 the evidence lends support to the hypothesis of significant behavioral change and also indicates that this change is attributable mainly to the convolution of the consumption patterns in current housing costs and food

organizational economics and institutions as missing elements in economic development analysis abstract the main objective of this paper is to apply x efficiency theory to the analysis of organizations and state enterprises with special reference to developing countries in particular the black box relating to the internal operation of organizations is opened up to understand better the decision mechanisms operating within firms and institutions intrafirm conventions are explored as they relate to the impact of external and internal pressures on the decision making process implications are drawn to improve the internal efficiency of institutions in developing countries

farsightedness changing stock location and the stability of international fisheries agreements changes in stock location may affect the stability of international fisheries agreements this paper offers a theoretical analysis of the stability of regional fisheries management organisations rfmos in a non cooperative coalition formation game based on the classic gordon schaefer model we employ a new stability concept which modifies farsighted stability chwe j econ theory 63 299 325 1994 we call this concept farsighted downwards stability fds we also employ the internal stability is concept for comparison analytical results regarding fds for symmetric players without changing stock location show stable grand coalitions for n le 4 player games and the possibility for partial cooperation sensitivity analysis deals with changing stock location and cost asymmetry stability decreases in n increases when costs are asymmetric and increases when fds is employed farsighted conjectures on behalf of rfmo members can thus help to maintain cooperation as stock location changes however fds is more sensitive to changes in stock location than is

a formalisation and test of the factor productivity explanation of international differences in service prices this paper extends and integrates previous models of the determinants of international differences in the prices of services relative to tradable commodities the authors provide a model capable of identifying the effects of differences in total factor productivity on service price differences separately from the effects of factor endowment differences they propose a method for measuring these factor productivity difference effects and apply this to a sample of sixty countries in 1980 the authors results provide support both for the endowment difference and productivity difference explanations suggesting that in this context at least the two hypotheses are complements rather than competitors copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

privatization technical efficiency and welfare consequences the case of the cote d ivoire electricity company cie abstract in 1990 cote d ivoire privatized the management of its electric power company lease contracting in this paper we are interested in identifying the economic effect of this institutional change by estimating a stochastic production frontier we have found that productive efficiency improved after privatization thanks to organizational innovations total factor productivity gains have been closely associated with a cost reduction strategy the way these gains have been distributed in a monopoly context suggests that consumers have been the main beneficiaries through a significant decrease of the relative price of electricity

the effect of education on cognitive ability this paper analyzes whether schooling increases intelligence measured by intelligence quotient iq we use a longitudinal dataset where the individuals have conducted iq tests both at ages 10 and 20 we estimate the effect of schooling on iq at age 20 conditional on iq at age 10 and other measures of early cognitive ability to account for selection into noncompulsory schooling ordinary least squares estimates indicate that 1 year of schooling increases iq by 2 9 3 5 points about 0 2 sd deviations and instrumental variables estimates are similar

extending the sample size in cross country demand analysis abstract results from different phases of the international comparison project and from different sets of countries are compared and combined

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

cooperation on climate change mitigation abstract we analyze conditions under which it is possible to achieve efficient mitigation of greenhouse gas emissions with a self enforcing international agreement in which all countries find it in their self interest to abide by the agreement we model the choice of emissions by countries as a dynamic game we use a two part punishment scheme for deviations from an agreement that is renegotiation proof and show when this scheme supports the efficient outcome as a subgame perfect equilibrium using numerical examples we show that an efficient subgame perfect equilibrium exists for a range of reasonable parameter values the existence of such equilibrium may be non monotonic in the discount rate and the ratio of slope of marginal abatement cost and marginal damages

mental retirement and schooling we assess the validity of differences in eligibility ages for early and old age pension benefits as instruments for estimating the effect of retirement on cognitive functioning because differences in eligibility ages across country and gender are correlated with differences in years of schooling which affect cognitive functioning at old ages they are invalid as instruments without controlling for schooling we show by means of simulation and a replication study that unless the model incorporates schooling the estimated effect of retirement is negatively biased this explains a large part of the mental retirement effects which have recently been found

privatization in theory and practice privatization george yarrow this paper examines the theoretical and empirical case for private versus public ownership privatization usually leads managers to place greater emphasis on the pursuit of profits however whether this is beneficial to society depends on the trade off between possible market failures due to a lack of competition and deficiencies in government control of public firms the competitive and regulatory environment is more important than the question of ownership per se in competitive markets there is a presumption in favour of private ownership where there is a natural monopoly vigorous regulatory action is required the evidence suggests that privatization has led to improved performance by firms such as the national freight corporation and cable and wireless which operate in a relatively competitive environment the benefits are less clear in the case of firms like bp britoil and british aerospace however the most worrying case is that of british telecom and the projected privatization of british gas where little thought has been given to limiting the abuse of monopoly power rather the regulatory environment has been tailored to the needs of the existing management and to ensuring a successful share flotation privatization is also advanced as a weapon for reducing trade union power encouraging wider share ownership redistributing wealth and improving the public finances however there are other policy instruments better suited to achieving these objectives the existing privatization programme has not led to a marked widening of share ownership and has resulted in windfall gains to a small group of investors at the expense of taxpayers in general

user cost and housing tenure in developing countries abstract this paper reports on research conducted at the world bank to increase understanding of developing country housing markets in particular of housing demand behavior the objectives of the paper are 1 to briefly review recent evidence on housing demand parameters in developing countries including new estimates for colombia egypt el salvador ghana india jamaica korea and the philippines and 2 to examine similarities and differences among cities in housing demand the analysis emphasizes differences in housing demand by tenure particularly for renters and owners but also for squatters and non squatters and paralleling the literature in developed countries stresses the importance of accounting for the impact of income and relative prices on housing demand

markets market failures and development a central question in development economics is how can we account for differences in the levels of income and the rates of growth between the developed and less developed economies in the 1950s and 1960s there was a standard answer to this question the poor are just like the rich except they are poorer they have less human and nonhuman capital there was an immediate prescription for this diagnosis increase the resources of ldcs either by transferring capital to them either direct aid or education or by encouraging them to save more today these answers seem less convincing that they did two decades ago if the problem were primarily a shortage of physical capital the return to capital should be much higher in ldcs than in developed countries and the natural avarice of capitalists would lead to a flow of capital from the more developed to the less developed economies see howard pack 1984 and my 1988 paper if the problem were primarily a shortage of human capital then the educated in ldcs should receive a higher absolute as well as relative income than the educated in more developed economies how then can we account for high levels of unemployment among the educated and the migration of the educated from ldcs to more developed economies moreover the predictions of the standard neoclassical growth model of a convergence of growth rates in per capita income with permanent differences in per capita consumption being explained by differences in savings rates and reproduction rates do not seem to have been borne out these observations suggest that the ldcs differ from the developed countries in at least some other important respects and this view is corroborated by those studies which have looked at the productivity of similar plants operating in developed and less developed economies see pack 1984 1987 the difference can be attributed perhaps tautologically to differences in economic organization to how individuals factors of production interact and to the institutions which mediate those interactions among the most important of these institutions are markets it is by now well recognized that there are many instances of market failures in more developed economies see bruce greenwald and myself 1986 in some cases market failures may be ameliorated by nonmarket institutions if for instance capital markets do not function well perfectly if only because of costly and imperfect information nonmarket institutions internal capital markets within large conglomerates may develop market failure is more prevalent in ldcs and the nonmarket institutions that ameliorate its consequences are at least in many instances less successful in doing so the objective of this paper is to explore the causes and consequences of these market failures and the failure of private nonmarket solutions and to suggest possible roles for government intervention tdiscussants anne 0 krueger duke university stanley fischer world bank

economic perspectives on privatization despite being one of the most fundamental issues in political economy the question of the appropriate boundary between public and private enterprise received relatively little attention in mainstream economic analysis until quite recently in the 1980s however programs of ownership reform were started in many developed and developing countries dramatic though some of these policies have been they are likely to be overshadowed in the 1990s by even greater privatization in the reforming socialist economies the opening sections of this paper are organized around three broad and interrelated questions how does ownership matter for the efficiency of enterprise performance what is the role for privatization in financing public debts and deficits what are the distributional and political implications of privatization finally we examine privatization in practice in three countries britain chile and poland

the social costs of higher food prices some cross country evidence abstract this paper uses cross country data from 34 developing countries to examine the correlation between the real cereal price paid by consumers aggregate calorie intake and the infant mortality rate the results suggest that higher cereal prices across countries are associated with higher infant mortality the elasticity is between 0 2 and 0 6 however this correlation does not exist using time series data for individual countries the results require further investigation nevertheless they suggest that although the short run costs of higher farm prices may not immediately be evident there may be important long run social costs

the impact of foresight in a transboundary pollution game abstract we study the impact of foresight in a transboundary pollution game i e the ability of a country to control its emissions taking into account the relationship between current emissions and future levels of pollution and thus on future damages we show that when all countries are myopic i e choose the laisser faire policy their payoffs are smaller than when all countries are farsighted i e non myopic however in the case where one myopic country becomes farsighted we show that the welfare impact of foresight on that country is ambiguous foresight may be welfare reducing for the country that acquires it this is due to the reaction of the other farsighted countries to that country s acquisition of foresight the country that acquires foresight reduces its emissions while the other farsighted countries extend their emissions the overall impact on total emissions is ambiguous moreover our results suggest that incentive mechanisms that involve a very small possibly zero present value of transfers can play an important role in inducing a country to adopt a farsighted behavior and diminishing the number of myopic countries these incentives would compensate the myopic country for the short run losses incurred from the acquisition of foresight and can be reimbursed by that country from the gains from foresight that it enjoys in the long run

farsightedness in a coalitional great fish war we explore the implications of the farsightedness assumption on the conjectures of players in a coalitional great fish war model with symmetric players derived from the seminal model of levhari and mirman bell j econ 11 649 661 1980 the farsightedness assumption for players in a coalitional game acknowledges the fact that a deviation from a single player will lead to the formation of a new coalition structure as the result of possibly successive moves of her rivals in order to improve their payoffs it departs from mainstream game theory in that it relies on the so called rational conjectures as opposed to the traditional nash conjectures formed by players on the behavior of their rivals for values of the biological parameter and the discount factor more plausible than the ones used in the current literature the farsightedness assumption predicts a wide scope for cooperation in non trivial coalitions sustained by credible threats of successive deviations that defeat the shortsighted payoff of any prospective deviator compliance or deterrence of deviations may also be addressed by acknowledging that information on the fish stock or on the catch policies actually implemented may be available only with a delay dynamic farsightedness in that case the requirements are stronger and the sizes and number of possible farsighted stable coalitions are different in the sequential move version which could mimic some characteristics of fishery models the results are not less appealing even if the dominant player or dominant coalition with first move advantage assumption provides a case for cooperation with the traditional nash conjectures

factor endowments nontradables prices and measures of openness abstract the familiar dollar index of country openness is obtained essentially by attempting to remove the influence of nontradables prices from data on country price levels with residual price differences hypothesised to measure trade impediments differences in nontradables prices are in turn hypothesised to reflect differences in factor endowments which dollar proxies by gdp per capita this paper examines both the theoretical and empirical biases introduced to estimates of nontradables prices by using this proxy we show that while the approach provides a reasonable approximation on average relatively agricultural land or labour abundant countries are particularly poorly captured by gdp per capita

estimating strategic models of international treaty formation this article develops an empirical framework for analysing the timing of international treaties a treaty is modelled as a dynamic game among governments that decide on participation in every period the net benefit of treaty membership increases over time spillovers among members and non members accelerate or delay treaty formation by transforming participation into a strategic complement or substitute respectively the predictions of the model inform the estimation of the structural parameters based on a cross section of treaty ratification dates with this approach i estimate the sign and magnitude of strategic interaction in the ratification of the montreal protocol in the formation of europe s preferential trade agreements and in the growth of germany s network of bilateral investment treaties through a series of counterfactual experiments i explore different mechanisms that give rise to strategic interaction in the formation of these treaties

the persistence of early childhood maturity international evidence of long run age effects a continuum of ages exists within each starting class due to the use of a single school cut off date making the oldest children approximately twenty percent older than the youngest children at school entry we provide substantial evidence that these initial maturity differences have long lasting effects on student performance across oecd countries in particular the youngest members of each cohort score 4 12 percentiles lower than the oldest members in grade four and 2 9 percentiles lower in grade eight depending upon the country in fact data from canada and the united states shows that the youngest members of a cohort are even less likely to enroll in pre university academic track courses and high end academic universities taken together these findings point to important early relative maturity effects that propagate themselves into adulthood through the structure of education systems

parental income lifetime income and mortality this article studies the relation between parental economic resources and mortality later in life we use a data set on a cohort of individuals born in 1928 in the county of malmo in southern sweden which contains exceptionally detailed measures of parental household income from five years during the individuals childhood between 1929 and 1942 the data also contain very rich information on individual earnings throughout these individuals entire life cycle that allows us to construct a measure of lifetime earnings date and cause of death are obtained from national registers using cox proportional hazard models we find an inverse relationship between parental income and mortality also when controlling for individual lifetime income and when studying those with high education separately a competing risk analysis shows the relation between parental income and mortality to apply to cancer as the cause of death jel d31 i10 i12 j10

zero returns to compulsory schooling in germany evidence and interpretation abstract we estimate the impact of compulsory schooling on earnings using changes in compulsory schooling laws in west germany after world war ii most estimates in the literature indicate returns in the range of 10 to 15 while our research design is very similar to studies for various other countries we find a zero return we find no evidence that this is due to labor market institutions or the apprenticeship training system in germany the result might be due to the fact that the basic skills most relevant for the labor market are learned earlier in germany than in other countries

participation games and international environmental agreements a non parametric model abstract we examine the size of stable coalitions in a participation game that has been used to model international environmental agreements cartel formation rd based on these examples a consensus has emerged that in this kind of game the equilibrium coalition size is small except possibly when the potential benefits of cooperation are also small in this paper we develop a non parametric approach to the problem and demonstrate that the conventional wisdom is not robust in a general setting we identify conditions under which the equilibrium coalition size can be large even when potential gains are large contrary to previously examined leading special cases we show that reductions in marginal abatement costs in an international environmental game can increase equilibrium membership and we provide a measure of the smallest reduction in costs needed to support a coalition of arbitrary size

educational reform ability and family background in this paper we evaluate the impact of a major school reform that took place in the 1950s in sweden on educational attainment and earnings the reform which has many common elements with reforms in other european countries including the uk consisted of increasing compulsor schooling imposing a national curriculum and abolishing selection by ability into academic and non academic streams at the age of 12 comprehensive school reform our data combines survey data with administrative sources we find that the reform increased both the educational attainment and the earnings of children whose fathers had just compulsory education however the earnings of those with educated parents declined possibly because of a dilution of quality at the top end of the education levels the overall effect of the reform was however positive

participation and duration of environmental agreements we analyze participation in international environmental agreements in a dynamic game in which countries pollute and invest in green technologies if complete contracts are feasible participants eliminate the holdup problem associated with their investments however most countries prefer to free ride rather than participate if investments are noncontractible countries face a holdup problem every time they negotiate but the free rider problem can be mitigated and significant participation is feasible participation becomes attractive because only large coalitions commit to long term agreements that circumvent the holdup problem under well specified conditions even the first best outcome is possible when the contract is incomplete

omitted ability bias and the increase in the return to schooling over the 1980s there were sharp increases in the return to schooling estimated with conventional wage regressions we explore whether the relationship between ability and schooling changed over this period in ways that would have increased the schooling coefficient in these regressions our empirical results reject the hypothesis that an increase in the bias of the schooling coefficient due to a change in the relationship between ability and schooling has contributed to observed increases in the return to schooling we also find that the increase in the schooling return has occurred for workers with relatively high levels of academic ability

privatization and economic growth an empirical investigation from a sample of developing market economies this paper explores the economic determinants of privatization programmes and the macroeconomic impact of this institutional reform on the growth rate of the gdp a sample of thirty five developing market economies is considered over the 1988 92 period probit and tobit models are used to identify the determinants of successful privatization programmes then regressions are run where probabilities probit and expected values tobit are successively included as additional regressors beside the potential influence of other economic policy variables a significant positive effect is highlighted giving evidence of the importance of divestiture the economic effect is found to be stronger when this institutional reform took place in industry or infrastructure

world product and income international comparisons of real gross product the volume reports on the third phase of the united nations international comparison project icp the main results provide comparisons of real gross domestic product gdp per capita for thirty four countries in 1975 quantity and price comparisons are given also for personal consumption capital formation and public consumption and further subdivisions of final expenditures on gdp are estimated

stable coalition structures with externalities this paper argues that the sign of external effects of coalition formation provides a useful organizing principle in examining economic coalitions in many interesting economic games coalition formation creates either negatie externalities or posi tie externalities for nonmembers examples of negative externalities are research coalitions and customs unions examples of positive externalities include output cartels and public goods coalitions i characterize and compare stable coalition structures under the following three rules of coalition formation the open

international aspects of pollution control pollution is a by product of production is only gradually dissolved by the environment and crosses national borders the market outcome ignores the adverse effects of pollution and thus yields higher levels of output and pollution than would prevail under a supranational social planner which does care about pollution in practice governments often do not cooperate and this leads to outcomes of pollution and production in between the market outcomes and the outcomes under supra national social planning absence of precommitment leads to lower emission charges less cleaning up activities and more pollution appropriate levels of emission charges under the various outcomes are a result of this analysis attention is also paid to investment in clean technology the debate between optimists who believe that higher production is compatible with sound environmental policy and pessimists can be analysed in this way