comparing the incomes of nations a critique of the international comparison project this article s main purpose is to discuss certain key problems that arise in calculating purchasing power parities ppps when making international comparisons of real product while reviewing partially the work of irving kravis alan heston and robert summers 1982 before beginning the discussion the author wishes to record his opinion that this work of kravis heston and summers carried out and successively published over the past 15 years represents one of the great contributions to applied economics in the article that precedes this one kravis provides a survey of the applications of this type of data but it must be emphasized that any such listing can do only partial justice to the scope of new applications which seem to arise almost every day apart from applications to various aspects of international economic policy there is so much greater international variation in basic economic variables such as real income and relative prices than is usually found in typical intranational intertemporal comparisons that the new data inevitably represent an enormous increment in our science s general capacity for statistical experiment thus the debt owed to this team of research workers by the economics profession at large is immeasurable a ppp is essentially a form of international or interregional price index complicated but not essentially changed by the existence of national currencies for example suppose we found by some kind of index number calculation that the general price level in region a was 10 percent higher than in region b of the same country given a common currency the exchange rate between the money circulating in the two regions is clearly 1 0 but the ppp for region a in comparison with region b is 0 91 this being the number by which it is necessary to multiply a given nominal income in a to give it the same purchasing power as a corresponding income in b it follows that the ppp must be some average of the ratios among individual commodity prices in the two regions in the case of two countries with different currencies one can speak of a commodity ppp as being the rate of exchange between the two currencies which would equalize the price of a given commodity then the general ppp for the two countries is some average of the commodity ppps in international as in intertemporal comparisons there is a duality between the problem of measuring price levels and

agricultural intensification irrigation and the environment in south asia issues and policy options high population pressure and the rapid pace of human activity including urbanization industrialization and other economic activities have led to a dwindling supply of arable land per capita and a process of agricultural intensification in south asia while this process has significantly increased food production to feed the growing population it has also entailed considerable damage to the physical environment including degradation and depletion of natural resources and unsustainable use of land and water resources this paper employs the analytical tools of economic theory environmental and ecological economics to model the impact of irrigation in south asia it underscores the need for an eclectic approach to policy responses stemming from private and common property rights theories externality theory and sustainability theory with a view to environmentalizing agricultural development

does size matter reassessing the relationship between aquaculture and poverty in bangladesh abstract aquaculture has long been promoted by development institutions in bangladesh on the understanding that it can alleviate poverty most of this attention has focused on forms of the activity commonly referred to as small scale this article draws on concepts from the literature on agricultural growth and elaborates a typology of aquaculture based on relations of production which suggests that in bangladesh quasi capitalist forms of aquaculture may possess greater potential to reduce poverty and enhance food security than the quasi peasant modes of production generally assumed to do so the implications of this conclusion are explored

common agency and coordination general theory and application to government policy making we develop a model of common agency with complete information and general preferences with nontransferable utility and we prove that the principals nash equilibrium in truthful strategies implements an efficient action we apply this theory to the construction of a positive model of public finance where organized special interests can lobby the government for consumer and producer taxes or subsidies and targeted lump sum taxes or transfers the lobbies use only the nondistorting transfers in their noncooperative equilibrium but their intergroup competition for transfers turns into a prisoners dilemma in which the government captures all the gain that is potentially available to the parties

environmentalizing economic development a south asian perspective south asia s pursuit of economic development has entailed considerable damage to and exposed the fragility of the physical environment of the region this paper provides an analytical overview of the of the environmental problem that manifest themselves in south asia in a comparative perspective with east and southeast asian countries as well as selected developed market economics to date south asian development process has been environment intensive and environment depleting it is argued that environmental problems are likely to set serious constraints to sustain growth in production to support a growing population by exploring the relationship between indices of human welfare and bio diversity conservation the paper exposes the dichotomy of the development process finally the study underscores the need for a range of policy options that rely both based and non market based instruments in an integrated setting to enviromnentalize south asian economic development c 2004 elsevier b v all rights reserved

black hole tariffs and endogenous policy theory political economy in general equilibrium preface acknowledgments list of results 1 a preview of the results 2 endogenous policy theory a diagrammatic approach part i endogenous policy theory with specific factors the theory of industry tariffs in partial equilibrium 3 the probabilistic voting model of political efficiency and powerless politicians 4 endogenous lobbying theory and the contribution specialization theorem 5 endogenous tariff theory 6 the power function model of endogenous industry lobbying 7 three simple tests of the stolper samuelson theorem 8 the invisible foot and the waste of nations lawyers as negative externalities part ii endogenous policy theory in general equilibrium a long run theory of national tariff levels 9 the 2 x 2 x 2 x 2 model of endogenous redistribution theory 10 a prisoner s dilemma theory of endogenous protection the leontief model 11 the compensation effect and the multiple equilibrium trap 12 increasing returns to politics and factor endowments economic development and brazilian vitality versus the indian disease 13 endogenous protection in the united states 1900 88 14 a cobb douglas model 15 black hole tariffs 16 the endowment effect cross national evidence on endogenous tariffs part ii postscript 17 the senile industry argument for protection 18 optimal obfuscation and the theory of the second worst the politically efficient policy mathematical appendices references author index subject index

a positive theory of environmental quality regulation this paper demonstrates that environmental quality regulation may enhance producer wealth while simultaneously reducing an externality problem by restricting access to common property regulation not only corrects a resource misallocation but it creates a scarcity rent as well in the recent history of environmental quality the common access problem has been addressed by federal and state agencies through a standards based approach rather than through the enforcement of tradable property rights as a consequence rents from the right to use these assets have accrued to producers the data are convincing that there is a strong interplay between producers consumers and the victims of pollution each party has some influence on the outcome and one sided analysis neglects many important aspects of regulation environmental quality regulation is complicated but many of the observed perplexities are consistent with a rent seeking self interest theory of government 46 references 1 figure 7 tables

political internalization of economic externalities and environmental policy abstract this paper derives the characteristics of endogenous environmental policy in a common agency model of politics and proceeds to show that competition between lobby groups is an important source of internalization of economic externalities our analysis generalizes bhagwati s principle of targeting to the case of distorted political markets moreover we show that the politically optimal structure of environmental taxes incorporates a pigouvian adjustment however since lobby groups care about the distribution of income as well as about efficiency the equilibrium structure of taxes differs considerably from the pigouvian rule

comparative studies of national incomes and prices income comparisons between persons or groups of persons in different countries are a special field of inquiry mainly because there are different currency units for the most part the other theoretical and empirical problems encountered in international income comparisons are similar to those of within nation comparisons between different persons at the same time or different groups of persons either interspatially or what is more common intertemporally e g constant price series of national income the qualifications mainly and for the most part are included because some writers hold that international comparisons are complicated or even invalidated by differences in consumption patterns sometimes differences in tastes are held to underlie these variations in consumption patterns variations that are often much larger between countries than those found between regions within a country or between different periods in the same country this essay focuses in its methodological aspects on these special problems the basic problems that are common to international and within nation comparisons are left to the standard literature on national accounts 2 we turn now to the currency unit problems and reserve the question of tastes for a later section

the collapse of purchasing power parities during the 1970 s one of the striking facts concerning the relationship beiveen prices and exchange rates during the 1970 s has been the dismal performance of the predictions of the simple versions of the purchasing power parity doctrine ppp that doctrine in its absolute version states that the equilibrium exchange rate between domestic and foreign currencies equals the ratio of domestic to foreign price levels the relative version of the doctrine relates equilibrium changes in exchange rates to changes in the ratio of domestic to foreign prices during the 1970 s short run changes in exchange rates bore little relationship to short run differentials in national inflation rates and frequently divergences from purchasing power parities have been cumulative this paper reviews and analyzes the empirical record of exchange rates and prices during the 1970 s and the analysis is based on the experience of the dollar pound the dollar frecch franc and the dollar dm exchange rates section 2 presents the evidence on ppp during the 1970 s and contrasts it with the evidence from the 1920 s a period during which the doctrine held up reasonably well this analysis is relevant for assessing whether the flexible exchange rate system was successful in providing national economies with an added degree of insulation from foreign shocks and whether it provided policymakers with an added instrument for the conduct of macroeconomic policy the evidence regarding devia tions from purchasing power parities is also relevant for determining whether there is a case for managed float section 3 attempts to explain what went wrong with

environmental policy in a federation with special interest politics and inter governmental grants the paper explores the potential effect of intergovernmental grants igg on sub national local environmental policy in a federal structure in the model a politically inclined local government receives campaign contributions from the polluters lobby in return for lower pollution taxes a benevolent federal government uses igg as an incentive to reduce the resulting distortion in the local pollution tax igg are formulaic transfers that are conditional on pollution levels lower pollution in a sub national jurisdiction relative to others translates into a higher share of the grant and vice versa in equilibrium the grant effect reduces the distortion created in the pollution tax by the lobby effect and may even lead to a higher than pigouvian tax when the local government assigns a large enough weight on social welfare and or when the grant is large enough further igg result in the tax levels of jurisdictions becoming interdependent in an interesting way environmental policies in two jurisdictions may become strategic complements or substitutes depending on their relative pollution levels the possibility of strategic substitution implies that federal welfare may not increase even when environmental policy becomes stricter in one state

consumption savings and investment by social class in bangladesh does the rural sector support the urban sector this article employs input output analysis and information from a social accounting matrix and the concept of net savings to examine savings consumption and investment behaviour by various social classes in bangladesh in urban and rural areas considerable differences between social classes can be identified in all three respects a majority of the social classes in the rural sector does not appear to generate enough savings to sustain its consumption whereas the urban social classes do there seems to be little difference in consumption pattern of the rural rich and the urban rich there is considerable urban rural difference in the import intensities of consumption the findings of this study based on the hazari model do not establish the existence of urban bias but the problem seems to be one of rich bias rather than urban bias per se however the hazari model cannot capture all possible sources of urban bias and circumstantial evidence indicates concentration of advantages in the urban areas

technical change and labor absorption in asian agriculture some emerging trends abstract increased labor absorption in agriculture has been widely held to be the key to solving unemployment problems in developing asia following the historical experience of east asian countries the new seed fertilizer technology interacting with expansion of irrigation and cropping intensity initially increased labor absorption in wheat and rice production however evidence from recent village studies indicates that new labor saving chemical and mechanical innovations originating in the developed countries are being rapidly adopted by farmers of the developing countries owing to their private cost reducing characteristics this international transfer of technology contributes to increased productivity but results in net reductions of agricultural labor use recognition of the declining capacity of the agricultural sector for labor absorption indicates the need to seek solutions to unemployment problems in the off farm sector

the social choice of alternative corrective devices the social preference of corrective taxation to corrective subsidy or to a policy of no action at all is examined within the context of a simple general general equilibrium framework in which an external production diseconomy exists equilibrium positions are obtained for a number of different parameter sets and resource endowments for each equilibrium position different mechanisms are introduced as procedures for distributing revenues accruing to a central authority which administers the corrective tax or for collecting revenues to finance a subsidy programme the only income redistribution which occurs in this economy is through these distribution mechanisms any change in policy regarding the correction of allocation inefficiencies resulting from the existence of externalities in the economy will be reflected in changes in prices of both final goods and resources and the resulting income redistribution necessitated by the need for revenues by the central authority or the need to reduce tax collections from individuals if a corrective tax yields revenues from an industry to maintain a balanced budget constraint in an economy in which no government goods are produced a tax reduction implies transfers to individuals within this framework the following results emerge 1 if the distribution mechanism is regressive proportional or progressive the corrective tax will always be preferred to the corrective subsidy as a method for internalizing external costs only under extreme progressivity does this support become unanimous in all other situations only the agents controlling the one particular resource which identifies the firm will oppose the choice of the tax 2 the status quo equilibrium will also be preferred to the equilibrium resulting from the use of a corrective subsidy again this result occurs consistently and with the same coalition of agents supporting the status quo as supported the corrective tax 3 only under the proportional mechanism is the corrective tax preferred consistently to a do nothing policy if the distribution mechanism is progressive or regressive there exist situations in which the status quo equilibrium state will be preferred by a majority of individuals to the state resulting after corrective action is taken and resources are efficiently allocated as progression increases the likelihood of the corrective tax finding support from a majority of the agents in this economy tends to fall 4 while majorities may exist they appear to be tenuous at best in many situations the difference between utility levels is at times very small and with the introduction of transaction costs associated with casting a vote some individuals may find it less costly to abstain from voting in cases such as these a majority of those voting may oppose an alternative which would have been supported had transaction costs not been introduced there is also the problem of whether or not individuals actually perceive small differences in utility from state to state however since the model has demand functions based upon individuals who maximize a particular utility function it would be inconsistent to assume that as consumers they are aware of their utility when choosing between different commodity bundles but when comparing alternate states they suddenly have a perception problem the assumption of threshold perceptions for utility differences would require the development of an entirely different demand function this extension does not appear to be as profitable as the introduction of transaction costs 5 the distribution mechanism and the progressivity of the mechanism are exogenously determined the convention that voters choose from among competing corrective devices but do not choose the degree of progression or the specific form of the mechanism could be relaxed the easiest extension of this work can include both the choice of the progressivity of the distribution mechanism and the choice of the corrective device 6 a further extension of this work could include a role for the central authority within the equilibrium framework as a user of resources not only may voting carry a cost but the implementation and monitoring of corrective policies require resources this results in incentives in conflicting directions the costs involved in administering a programme reduce the potential gains to consumers while the expansion of an industry the central authority provides benefits to others bureaucrats to the extent that the resources used in the production of corrective policies gain particular groups may find income increases which offset price increases and make a costly corrective scheme more desirable than no action at all 7 another valuable extension of this work would be to generalize the production and utility functions to examine the implications of the model with variable elasticities of substitution between the inputs used in the two industries a further change within this framework would be to introduce an externality which results in increasing marginal damages rather than the decreasing marginal damages exhibited in this model

how pollution taxes may increase pollution and reduce net revenues this paper develops a positive theory of pollution taxation by a federal authority when pollution abatement subsidies are used by local governments environmental and industry lobby groups influence governments with campaign contributions first pollution may increase in the pollution tax because the abatement subsidy increases decreases with the tax and pollution increases decreases in the abatement subsidy this occurs because the lobbying incentives change at a pollution tax reform second pollution taxes may reduce net revenues because subsidy expenditures rise third pollution may increase simultaneously as net revenues fall finally the welfare effect of a pollution tax may be negative

labor absorption and agricultural development bangladesh s experience and predicament significant employment gains have resulted from the green revolution technologies in bangladesh while the kharif wet season employment has remained more or less stagnant employment in the rabi dry season increased fourfold between the early 1960s and the late 1980s with overall crop sector employment increasing by 30 interseasonal differences in employment have declined steadily the employment generating effect of the green revolution is slowing down i e agricultural growth at the margin has become progressively less labor intensive in recent years changes in the occupational structure may merely reflect a relocation of surplus labor from the farm to the nonfarm sector where it is also largely surplus rather than heralding a real turning point in bangladesh there is little prospect of agriculture providing much greater employment and there is little sign that labor transfer in bangladesh will lead to a pattern of successful industrialization as in the contemporary developed countries of east asia or the western countries

environmental protection in the federalist system the political economy of npdes inspections i introduction federal regulatory programs from occupational safety to protection of the environment are implemented jointly by national and state agencies more broadly almost all regulatory programs involve some delegation to branch offices meat inspections or regional districts tax collection given the pervasiveness of regulatory federalism surprisingly little research has been done on the political consequences of delegating national policy to local actors in particular the small but growing literature on the politics of regulation has almost completely ignored the role of federalism in implementing regulatory policy 1 perhaps the most widely accepted model of bureaucratic decision making peltzman s 1976 model of support maximization implies that delegation can have a profound impact on the implementation of regulatory policy peltzman s model posits that regulators maximize support while minimizing opposition in the context of environmental protection a rational regulator would calculate the marginal support from pollution abatement generated by inspecting a given plant and equate that to the marginal opposition arising from job loss generated by that action pashigian 1985 points out that in environmental legislation local and national interests are unlikely to be identical because industry the primary target of pollution control measures has an uneven geographic distribution thus a local regulator performing peltzman s calculation is quite likely to reach a very different decision than a national regulator this paper examines the extent to which local regulators are able to respond to local interests when enforcement of a national policy has been delegated to them there are three possibilities one is that delegation of enforcement to local government represents a complete abdication of control by the federal government at the other extreme is the possibility the federal government can delegate with no loss of control because of its ability to enforce its goals through the use of threats loss of authority over the program and incentives additional grant money the third possibility is that both local and national interests can influence a delegated program the federal government will lose some control when it delegates but the loss will not be total the clean water act of 1972 is one of the largest federal regulatory programs ever delegated to the states under the act the federal government took over the previously state level responsibility for regulating water pollution 2 under the clean water act industrial polluters are issued permits which specify types and amounts of pollutants allowed in effluent discharged during a given time period these limits are set by state or regional authorities but must conform to minimum national standards permit writers may consider the desires of the local community if those desires demand more stringent standards than the federal minimums but may not respond to community demands for lower standards local communities with considerable employment in the industry for example might want a lower standard than the federal mandate although a politically minded regulator does not have the ability to actually grant a permit with a lower standard a second source of discretion is available in the form of selective enforcement while permits are difficult enough to issue they are meaningless without some method of verifying compliance 3 the state or regional environmental protection agency epa conducts regular on site inspection of polluters although the epa requests that delegated states inspect polluters at least once a year it is not required in practice states have considerable discretion on how and when to inspect polluters this should not come as a surprise there are 7 500 npdes facilities in the country variation in state performance could be due to location alone this study using data from the epa s permit compliance database which tracks compliance with the clean water act analyses plant level inspection violation and effluent discharge data

why are services cheaper in the poor countries in their important work on international comparisons of national incomes and of comparative price structure kravis heston and summers i982 p 8 have noted that services are much cheaper in the relative price structure of a typical poor country than in that of a rich country this phenonomen has been documented now fairly systematically by the data gathered under their guiding hand of the united nations international comparison icp which covers 34 countries table i reproduced from their work i982 and fig i based on rows 3 and ii 13 indeed show this tendencyfor the relationship between relative service prices and real per capita gdp in this kravis heston summers 34 country 6 group sample the tendency is strongly evident except for the intermediate groups iii and iv

campaign contributions as investments the u s house of representatives 1980 1986 this paper treats the market for special interest campaign contributions and political favors as a simple asset market the model yields a simple equilibrium relationship among three variables the total amount of investor contributions a candidate receives the monetary value of the favors he has promised and his probability of winning using data on open seat races for the u s house of representatives i confront the model with a series of tests despite the starkness of the model the results of these tests are highly supportive

trade policy to promote entry with scale economies product variety and export potential with scale economies product variety and export potential production of socially desirable varieties of a product may be privately unprofitable if competition from imported varieties of the same general product is in part responsible for this market failure either tariffs or subsidies may be used to promote domestic entry this paper demonstrates that in domestic welfare terms tariffs may be superior to subsidies for this purpose furthermore because domestic firns will export as well as produce for the domestic market tariff protection which induces entry may give rise to intra industry trade that benefits foreigners and domestic residents la politique commerciale pour promouvoir 1 entree de producteurs domestiques dans les cas ou coexistent des e conomies d e chelle une varie te de produits et des possibilites d exporta tion quand coexistent les economies d echelle la variet6 de produits et les possibilit6s d exportation l auteur montre qu il peut etre non profitable au niveau prive de produire une variett de produits socialement d6sirables si c est la concurrence de vari6t6s import6es d un produit gdneral qui est responsable de cette defaillance du march6 on peut utiliser soit les droits de douane soit les subsides pour promouvoir l entr6e de producteurs domestiques ce memoire demontre que l utilisation des droits de douane est une solution pref6rable en termes de bien etre domestique de plus comme les entreprises domestiques vont exporter en plus de produire pour le march6 domestique la protection douaniere qui suscite l entr6e peut aussi donner lieu a du commerce intra industrie qui a des retombees ben6fiques pour les etrangers et pour les residents de l economie domestique

identification of key sectors in the bangladesh economy a linkage analysis approach this paper purports to identify key sectors in the bangladesh economy employing the concepts of forward and backward linkages an attempt is made to rank sectors according to their employment and output potentials the paper draws a distinction between gross and net linkages defined respectively on the inverses of the leontief technology matrix and the domestic matrix using data for bangladesh it is shown that the transition from gross to net linkages implies significant divergence in sectoral rankings this appears to be true for ranking of sectors in terms of output and employment suggesting a potential conflict between employment and output generation potentials particularly in the industrial sectors when net linkages are considered agricultural sectors appear to rank high on both counts

purchasing power parities and phase iv of the international comparison project do they lead to real estimates of gdp and its components abstract this paper analyzes results from phase iv of the united nations international comparison project icp it examines the icp s estimates of real gdp and per capita gdp for 60 countries along with the estimates of detailed components of gdp for india and sri lanka as compared with some industrial countries we conclude that although detailed results are often illuminating levels of per capita gdp tend to be incorrect a systematic bias seems to be present in the icp leading to a strong overvaluation of developing countries gdp icp results therefore as judged also by the statistical commission of the united nations cannot be accepted for policy purposes at the world level

market analysis technical change and income distribution in semi subsistence agriculture the case of bangladesh for the first time the model developed by hayami and herdt is applied to determine gains from modern varieties of rice in bangladesh and the distribution of these gains between consumers and producers the results suggest that consumers surplus is much greater than it would have been had the high yielding crop varieties hyvs not been introduced by keeping the real price lower than it would have been otherwise the modern varieties have tended to be income equalizing for urban consumers the hayami herdt partial model even suggests that given the relatively inelastic demand for rice in bangladesh the real cash income of producers has risen slightly as a result of these new technologies in reality however the impact of these changes on incomes of farmers and the distribution of income between those involved in production is more complex it is suggested that if a less partial view is taken and if account is taken of lower cost of obtaining home consumed produce the increase in income may be greater in any event there are dangers in using such a partial model to predict the developmental consequences of technological changes affecting a staple crop and attention needs also to be given to the possibility that the supply curve may not have the simple form and pivot in the way supposed by hayami and herdt while the hayami herdt model is simple to apply it is best used as a first approximation or starting point rather than a final solution it ignores a number of criteria that could be important in assessing new agricultural technologies such as their impact on the variability of benefits to producers and consumers and their consequences for sustainability of production furthermore the hayami herdt model does not deal specifically with changes in factor shares in farm production nor does it consider the impact on income distribution of the ownership and control of critical input like irrigation and imperfection in the rural credit market it is pointed out in our paper that the adoption of hyvs has been associated with important variations in factor shares in bangladeshi rice production analysis of available farm level data indicates that the relative share of labour has fallen suggesting an uneven distribution of gains from technological changes between the owners of non labour resources and those of labour resources however the absolute share of labour has increased and it seems that rural employment has risen as result of the new technologies

the political economy of trade liberalization and environmental policy a pressure group model where environmental and industry lobby groups offer political support in return for favorable pollution tax policies is used to explain and predict the equilibrium pollution tax in sectors protected by tariffs the political economy effects of trade liberalization are investigated the pollution tax is shown to decrease if the lobbying effort by the environmental lobby decreases more rapidly than by the industry lobby ceteris paribus the level of political conflict falls with trade liberalization pollution may increase because of a reduction of the pollution tax and tax revenues may fall simultaneously as pollution increases the global trading system is currently undergoing another round of multilateral trade liberalization and regional economic integration is occurring in several parts of the world the trade environment link has become an important part of trade liberalization talks it is commonplace for industry representatives to argue that less stringent environmental regulations give less developed countries ldcs a comparative advantage in pollution intensive goods and that industries with high abatement costs will migrate to ldcs environmentalists argue that international differences in environmental laws and regulations may be reduced to their lowest common denominator through political pressure this is not a fear of trade liberalization itself but of the effects of lower trade barriers on the political determination of environmental regulation

when subsidies for pollution abatement increase total emissions in a first best deterministic world it is well known 2 28 30 that a unit tax on emissions equal to marginal damage is an efficient mechanism for internalizing the damages caused by polluting firms a unit subsidy for emissions abated also equal to marginal pollution damage has the same desirable property but only in the short run in the long run such subsidies induce polluting firms to operate at too small a scale and attract an excessive number of new firms to the polluting industry this can have the perverse result that there are more emissions when abatement is subsidized than when it is not nevertheless economists have been reluctant to give up entirely on the subsidy approach recognizing with oates 23 290 that polluters will obviously be far more receptive to measures that assist with the costs of pollution control than to those that place the burden upon themselves it is therefore not surprising that economists have continued to look for and find new justifications for subsidizing pollution control thus mestelman 20 187 argues that the subsidy scheme may be a second best alternative for externality control when the direct taxation alternative is not politically viable mchugh 17 64 shows that subsidies for pollution abatement expenditures can be a useful instrument in the case of cost increasing technological innovations harford 6 demonstrates that subsidies for pollution control inputs may be efficient when enforcement is sufficiently costly harford 7 makes still another argument for subsidies in the case in which the day to day performance of abatement equipment is uncertain but the uncertainty can be reduced by maintenance expenditures finally there are schemes for combining subsidies and taxes 14 26 given the continuing interest in subsidies it is important to examine carefully the disturbing case in which subsidies increase rather than decrease total emissions

dollar gnp estimates for central and eastern europe 1970 90 a survey and a comparison with western countries abstract in this paper a survey of the dollar gnp estimation methods used in the last 20 years for centrally palnned economies is made none of the different approaches is deemed to be fully satisfactory an explanation is offered as to why the construction of a better method would be impossible at this time the most realistic 1990 per capita gnps for practical use are indicated varying between about 4000 for romania 8000 for czechoslovakia in addition by examining the structure of the economy in terms of contribution to gdp of agriculture industry and services and comparing east and west in this respect the hypothesis is put forward that the technological and organizational evolution of eastern economies basically stopped in the early 1970s

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

are contributors rational untangling strategies of political action committees empirical public choice literature and casual observation suggest that the behavior of political action committees is remarkably unsophisticated meaning that pacs give to those legislators who would support their interests anyway thus it is suggested that contributor behavior deviates from rational behavior which is a cornerstone of economic analysis in this paper a switching regression model is estimated that allows for strategies of pacs to vary for different contribution recipients i analyze the behavior of farm pacs over three election cycles in contrast to previous findings i find that contributor behavior is not inconsistent with rational behavior contributors who attempt to influence the voting behavior of members of congress give the most money to legislators whose constituency interest suggests that they are likely to be undecided on how to vote and pacs give less money to legislators who represent districts with larger farm populations because those legislators are likely to vote in con

the interaction of factor and product market distortions in developing countries this essay will examine distortions in product and factor markets in developing countries and the interaction of these distortions in respect to the development strategies applied the analysis will concentrate on policy imposed distortions where departures from efficient resource allocation result from policy actions these contrast with distortions resulting from market imperfections 1

green gold burley tobacco smallholder agriculture and poverty alleviation in malawi abstract the abolition in 1990 of the estate monopoly on cultivation of burley tobacco is expected to play an important role in reducing poverty among smallholders in malawi a nationwide survey in 1993 shows that smallholder households cultivating burley also grow more hybrid maize use more fertilizer and are more food secure but resource poor households particularly those headed by women face land and labor constraints on burley adoption burley and hybrid maize increase the demand for hired labor but not enough to absorb the growth in the rural labor force broad based poverty alleviation requires technology and programs targeted at the majority of smallholders with holdings of 0 5 hectares or less

cleaning up while cleaning up pollution abatement interest groups and contingent trade policies this paper analyzes the political economy of environmental policy formation in a trading economy with established rules for administered protection we argue that the social costs associated with the adoption of an inefficient environmental regime are likely to be compounded by induced restrictions on trade when the effected industries are import competing the preferences of interest groups for alternative environmental regimes tend to be linked to the legal institutional setting in which trade policy is conducted under existing rules and practices in the area of administered protection there is reason to believe that interest group preferences for an inefficient approach to pollution control will be strengthened because the adoption of such a regime is more likely to lead to a concomitant increase in trade barriers

service induced campaign contributions and the electoral equilibrium candidates for office are modeled as promising services such as support for legislation and intervention in the bureaucracy to interest groups in exchange for campaign contributions an electoral equilibrium is characterized in which candidates choose service contribution offers and interest groups choose whether to contribute the model provides several explanations of congressional incumbents success in over 90 percent of their reelection contests a recognition advantage a high personal valuation of the office a lower cost of providing services and policy alignment with high demand interest groups the model yields predictions that are consistent with empirical findings on the relation between campaign contributions and election outcomes

rent seeking and its implications for pollution taxation one of the fundamental insights gained from the study of economics comes from an understanding of how market prices arising from private property and exchange can motivate efficient responses to the problem of scarcity not surprisingly when private property rights and market exchange are deemed not to be feasible for either technological or political reasons economists have overwhelmingly recommended that politically imposed prices be employed as surrogates for market prices the most extensively discussed example of this in the literature is the use of pollution taxation as a means of motivating polluters to take the full cost of their polluting activities into account 1