cotton subsidies the wto and the cotton problem wto and the cotton problem following an 8 year long dispute over cotton subsidies brazil and the united states signed a memorandum of understanding on april 21 2010 effectively paving the way for settling the dispute this paperargues that cotton subsidies are just the tip of the iceberg while a number of other perhaps more important issues require attention and indeed political will chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities which reflects for the most part the large supply response by china and india a direct consequence of con version to biotech cotton varieties in these and other countries such response which kept cotton prices low compared with other commodities imposes a competitive disadvantage to non users of biotech cotton the paper also highlights two additional constraints faced by the cotton producing countries of west and central africa namely the structural inefficiencies of their primary processing industries also known as ginning and the appreciation of the cfa franc against the us dollar without downplaying the importance of subsidy elimination the paper concludes that these impediments should receive high priority in the policy agenda

a general equilibrium model of congressional voting in this paper we specify a model in which congressmen constituents and campaign contributors simultaneously decide on behavior constituents and contributors desire to influence the voting behavior of congressmen congressmen on the other hand want to be elected and vote accordingly we empirically test this model using roll call voting on eight bills dealing with economic regulation and find support for the model our results indicate that part of the voting behavior of congressmen may be explained by noneconomic factors we also find that unions and businesses as campaign contributors are sometimes influential unions are more often influential than is business ideological factors are also important in explaining voting

legislative monopoly and the size of government if the economics profession had a fetish it would surely be competition unrestricted competition allows resources to flow to their most productive uses and maximizes the net welfare of society one of the few points virtually all modem economists would agree on is that with the possible exception of a few well defined special cases e g money production and public utilities they have never met an entry barrier they did not want to eliminate entry barriers facing potential competitors in markets reduce economic efficiency and generate social waste in a classic article tullock 2 extended this reasoning to the political process he makes the following argument lower entry barriers into politics e g lowered costs of entry into the legislature for potential entrants makes governmental decision making more competitive and tends to make p mc 2 competitive government will supply a higher level of public goods at lower tax prices taxes will therefore be lower holding other things equal in political jurisdictions which are more competitive while taxes will be higher in monopoly jurisdictions which will seek to exploit monopoly rents from taxpayers this reasoning makes the assumption that it is appropriate to model government as a kind of firm which provides public goods in exchange for tax revenues from taxpayer voters in such a setting increased competition would most likely produce increased efficiency in the provision of public goods and increase net social welfare buchanan 6 made a very different argument which while not directly intended to apply to the problem of the behavior of government may have direct bearing on those problems he was concerned with the social welfare effects of the monopolization of crime by organized criminal

externalities in urban sustainability environmental versus localization type agglomeration externalities in a general spatial equilibrium model of a single sector monocentric industrial city abstract this paper studies urban sustainability from the perspective of externalities we develop a general spatial equilibrium model of a monocentric city in which two types of externalities occur on the one hand pollution in the industrial center leads to a spatially differentiated deterioration of the environmental quality in the residential area on the other hand the existence of the city is explained by agglomeration economies represented as simple marshallian external benefits in production we investigate free market versus first best and second best optimal spatial equilibria and conclude that the pursuit of environmental goals may sometimes come at the expense of reduced agglomeration economies but may actually sometimes also stimulate these economies

coexistence and segregation of two groups in a metropolitan area through externalities abstract this paper proposes to regard the population distributions of two groups in a metropolitan area as equilibrium solutions of systems of ordinary differential equations this approach an extension of the miyao s single subarea model to a many subarea case allows us to incorporate the effect of fiscal pecuniary neighborhood externalities into the classic alonso mills muth model this paper investigates its three typical cases and obtains one coexistent and two segregated solutions consideration on these cases leads to the conclusion that substantial neighborhood externalities other than simple tax redistribution exist between the groups in the united states as by products of this analysis it is also shown that positive bid gradients and discontinuities of bid prices are realized under suitable conditions

racial prejudice and residential segregation the yinger model revisited abstract yinger s model of racial prejudice in the housing market is the first rigorous alternative to bailey s early work it is important both because his specification of racial prejudice is intuitively plausible and because it has been adopted in much empirical work but never before been subjected to rigorous theoretical examination however his derivation of equilibrium conditions rests in part on inappropriate analyses that significantly affect his conclusions this paper derives what i regard as the appropriate equilibrium conditions yinger s original finding that the white community has strong incentives to foster seller discrimination against blacks remains strongly supported

revisiting the cotton problem a comparative analysis of cotton reforms in sub saharan africa summary the cotton sector has been among the most regulated in sub saharan africa ssa and still largely is in west and central africa wca despite repeated reform recommendations by international donors on the other hand orthodox reforms in east and southern africa esa have not always yielded the expected results this paper uses a stylized contracting model to investigate the link between market structure and equity and efficiency in ssa cotton sectors explain the outcomes of reforms in esa and analyze the potential consequences of reforms in wca we illustrate our arguments with empirical observations on cotton sector performance

the possibility of positive rent gradients reconsidered abstract despite empirical evidence to the contrary most residential location models are consistent only with a negative rent gradient richardson has suggested including average neighborhood plot size as an argument of the utility function a positive rent gradient is not then a priori inconsistent with equilibrium however richardson does not define the concept of equilibrium and the purpose of this paper is to suggest a reasonable definition and to show that the rent gradient is negative if the utility function is strictly quasi concave and if individual and average neighborhood plot size are substitutes

bargaining laws as a cause and consequence of the growth of teacher unionism this study analyzes state level data for 1959 78 to determine whether the rapid growth of teacher unionism during those years was primarily a result or a cause of the public sector bargaining laws adopted during the same period the author finds contrary to the view of some scholars that the enactment of laws requiring public sector employers to bargain with majority representatives of their employees was the single most important cause of the growth in the proportion of teachers covered by union contracts although the growth in teacher unionism in turn encouraged the adoption of some new or stronger bargaining laws this effect was relatively weak more important predictors of new bargaining laws included the extent of political patronage in a state and the bargaining laws adopted by neighboring states

the theory of economic regulation and public choice and the determinants of public sector bargaining legislation in this study we used the theory of economic regulation and public choice to derive a model to explain the pattern of public sector bargaining laws among the states we find this type of legislation is influenced by the following demand factors 1 the extent of public sector union membership which represents the interest group hypothesis has a positive influence on pro union legislation 2 the extent of employer opposition to unions as measured by unfair labor practice charges against employers in representation elections has a negative effect on bargaining laws 3 two taste variables the salaries of public employees and the percent of nonwhite employment in the state have a positive influence on these laws a result which will be surprising to many people is that the extent of private sector union membership has no significant influence on the passage of public sector bargaining legislation

public and private sector wages interactions in a general equilibrium model it is common wisdom that public sector wages are not determined in the same way as private sector wages at the same time the empirical evidence available for oecd countries finds a strong positive correlation between public and private sector wages in this paper we develop a model that is consistent with a political economy view of the determination of public sector wages and employment while being consistent with the said empirical evidence public finance constraints are crucial in booms governments expand employment and wages while in downturns lack of tax revenues forces the government to cut back the wage bill

the market for laws an economic analysis of legislation considerable insight into the workings of government has been gained in recent years by analyzing political behavior in the same way that economists analyze market behavior such analysis has led to at least two actually several distinguishable but often overlapping developments one might be labeled the interest group theory of government 1 4 10 11 12 16 while the second could be referred to as the economic theory of legislatures 4 5 10 15 18 the purpose of the following presentation is to combine these two theoretical developments and treat the legislative process as a market for laws then by simultaneously considering interest group characteristics and legislative production costs hypotheses concerning both the level of interest group pressure and the magnitude of legislative output are examined in particular the primary issues to be addressed are 1 what determines the number of interest groups formed in a state and 2 what impact does the number of interest groups have on the level of legislative output in the process the developing economic approach to government is extended in two directions first this study contains what appears to be the first direct empirical examination of the question of what factors lead to or limit aggregate interest group demands for legislation and second the level of interest group pressure and the constraints on or costs of legislative decision making are considered to simultaneously determine the aggregate output of the legislative process virtually all previous studies of interest group legislation examine the impact of specific interests on specific legislation 2 the following presentation is divided into five sections in addition to this introduction in order to explore the issues suggested above section ii characterizes the political process as a market in order to justify the theoretical hypotheses to be tested section iii details the theoretical

dynamic instability of a mixed city in the presence of neighborhood externalities it has been often asked whether a city currently accommodating a variety of economic social and racial groups will continue to be a mixed city or will become exclusively occupied by a single group particularly poor blacks with all other groups moving out of the city in the long run in order to answer this question properly it seems essential to develop a long run dynamic model of a city with emphasis on socioeconomic factors like neighborhood externalities within or among various groups of residents as well as spatial factors like the individual choice of residential space and location it might be safely said that in the literature the only theoretical work which employs a long run dynamic approach to this kind of problem is a paper on dynamic models of segregation by thomas schelling 197 1 although his socioeconomic analysis has revealed some of the dynamic properties of a racially mixed area with neighborhood externalities his model itself is quite unsatisfactory from the economic point of view since it lacks individual utility functions and thereby disregards the aspect of the individual choice of space and location within the city 2 as a result he failed to analyze the effect of spatial segregation within the city on the long run nature of the residential composition of the city in this paper i develop a long run dynamic model of an open city which accommodates two groups of households for example blacks and whites rich and poor young and old with their utility functions depending on a consumption good and residential space i also assume two kinds of neighborhood externalities the first is called negative intergroup externalities that is the utility level of a typical household in one group is adversely affected by an increase in the number of households in the other group living in the city the second is called positive intragroup externalities that is the utility level of a typical household in one group is positively affected by an increase in the size of its own group in in the city first i define a mixed city equilibrium as a long run equilibrium which allows the two groups to coexist in the city in the long run and then introduce a dynamic adjustment process of household movement into and out of the city it is proved that the mixed city equilibrium is always unstable in the presence of negative intergroup externalities and or positive intragroup externalities if residential land is perfectly homogeneous and there is no differential transport cost incurred within the city it turns out however that in the case of a monocentric city with positive transport cost the mixed city equilibrium may be stable or unstable depending on the degree of neighborhood externalities because of the stabilizing effect of spatial segregation between the two groups within the city

the world trade organisation s doha cotton initiative a tale of two issues four west african nations have demanded that the world trade organization s doha development agenda include a cotton initiative that involves two issues cutting cotton subsidies and tariffs and assisting farm productivity growth in africa the authors provide estimates of the potential economic impacts of 1 complete or partial removal of cotton subsidies and import tariffs globally and 2 cotton productivity growth through the adoption of genetically modified gm cotton varieties they use the latest version of the gtap database and model their results confirm that unlike for other agricultural subsidies and tariffs for cotton it is subsidy reductions rather than tariff cuts that would make by far the largest impact for sub saharan africa the potential gains are huge relative to the effects on that region of reforming other merchandise trade policies and they could be more than doubled if that reform provided the cash for farmers to take advantage of the biotechnology revolution and adopt gm cotton varieties but those potential gains and the affordability of switching to costly gm seed depend crucially on the extent to which high income countries are willing to lower domestic support to their cotton farmers

bt cotton in india field trial results and economic projections abstract the performance of bt cotton in india is analyzed on the basis of field trial data from 2001 the amounts of pesticides applied during the trials were reduced to one third of what was used in conventional cotton while under severe pest pressure yield gains were 80 productivity effects are modeled econometrically with a damage control specification the first approval for the commercial cultivation of bt hybrids was given in 2002 by 2005 the technology is expected to cover one quarter of total indian cotton area medium term projections show sizeable welfare gains for the overall economy with farmers being the main beneficiaries

cotton in a free trade world i introduction cotton has been at the center of much of the controversy surrounding the inability of the world trade organization wto membership to reach consensus regarding significant agricultural trade reform in 2003 four african countries benin burkina faso chad and mali circulated a proposal presented as their negotiating position for the cancun ministerial conference wto 2003 this proposal called for the elimination of cotton subsidies worldwide due to its status as a special product essential for agricultural and economic development in many less developed countries ldc support for this proposal solidified among other developing countries referred to as the group of 21 g 21 with a leading role played by the nation of brazil which had filed its own grievance against u s cotton programs in 2003 failure on the part of developed countries to meet the demands of the g 21 resulted in a collapse of the cancun meetings at the recently concluded hong kong ministerial declaration language was included in the ministerial declaration that reaffirms the intent of the wto 2005 to specifically reform the global trading rules for cotton while the text of this intent appears in brackets indicating that it does not represent complete consensus on the issue by all negotiating parties it is consistent with the wording of the july agreement and the cotton initiative s call for an early harvest of cotton as noted by wto 2004 cotton has been described as the litmus test seatini 2004 for the ideals of the doha development agenda to deliver on its commitments to correct and prevent restrictions and distortions in world agricultural markets wto 2001 agreement on meaningful reform of the cotton trade might break the impasse that currently exists in agriculture negotiations failure to do so may threaten gains made in the doha round itself as noted by andrews 2005 while the commodity support programs of developed countries in general have been criticized in global trade talks only recently has the legality of u s commodity programs been directly and specifically challenged with a particular emphasis on cotton attention on cotton is predicated by the fact that in 2002 2003 the united states accounted for 40 of world cotton exports and 63 of world cotton subsidies as noted in goreaux 2004 but cotton production is subsidized in other countries as well in the european union eu greece and spain produce 2 5 of the world s cotton yet receive 18 5 of the world s cotton subsidies as observed by goreaux 2004 as shown in table 1 subsidies to eu cotton growers are approximately 1 per pound of lint compared to 20 cents per pound in the united states in china the world s largest cotton producer the estimate of per pound assistance for cotton growers is 8 cents other per pound subsidies offered to cotton producers include egypt at 14 cents mexico at 8 cents and 6 cents in turkey in addition to the trade distorting effect of domestic support offered to producers many importing countries have been using tariffs to restrict imports china the world s largest importer of raw cotton has as wto mandated two tier tariff structure on cotton imports known as a tariff rate quota trq the in quota tariff rate for cotton to china is 1 while the out of quota tariff rate is 40 for any imports above 890 000 metric tons about 4 million bales 1 other import tariffs rates by major cotton importers include india at 10 mexico at 9 7 excluding tariff free imports from the united states as part of the north american free trade agreement and pakistan at 5 table 1 also provides a comparison of these cotton import tariff rates across importing countries as noted by the overseas development institute odi 2004 many studies have attempted to quantify the impacts of both united states and other countries subsidies on world cotton prices and production

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

market distortions and benefits from research the benefits from cost reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies while any price policy affects the distribution of research benefits the net national or world benefits may be reduced lef unchanged or increased depending on the nature of the policy and the significance of the country in the world market for the commodity some implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised

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

dispelling some misconceptions about agricultural trade liberalization there has been a great deal of public discussion over the impact that agricultural trade liberalization would likely have especially on low income countries unfortunately the public discussion has been characterized by a number of misconceptions this paper provides a clarifying discussion of the issues involved among the key points addressed are 1 agricultural subsidies are not nearly as large as has been portrayed 2 tariffs are actually far more distortionary than subsidies and some low income countries actually benefit from rich country subsides and 3 widespread tariff reductions will not inflict large damage on developing countries as a result of preference erosion the case for removing agricultural trade barriers remains compelling even without the exaggerations and misconceptions

recent and prospective adoption of genetically modified cotton a global computable general equilibrium analysis of economic impacts abstract this article provides estimates of the economic impact of initial adoption of genetically modified gm cotton and of its potential impacts beyond the few countries where it is currently common use is made of the latest version of the gtap database and model our results suggest that if other developing countries especially in sub saharan africa were to follow the lead of china south africa and most recently india adoption of gm cotton varieties could provide even larger proportionate gains to farmer and national welfare than in those early adopting countries furthermore those estimated gains are shown to exceed and reinforce those from a successful campaign under the wto s doha development agenda to reduce remove cotton subsidies and import tariffs globally

cotton subsidies the wto and the cotton problem following an 8 year long dispute over cotton subsidies brazil and the united states signed a memorandum of understanding on april 21 2010 effectively paving the way for settling the dispute this paper argues that cotton subsidies are just the tip of the iceberg while a number of other perhaps more important issues require attention and indeed political will chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities which reflects for the most part the large supply response by china and india a direct consequence of con version to biotech cotton varieties in these and other countries such response which kept cotton prices low compared with other commodities imposes a competitive disadvantage to non users of biotech cotton the paper also highlights two additional constraints faced by the cotton producing countries of west and central africa namely the structural inefficiencies of their primary processing industries also known as ginning and the appreciation of the cfa franc against the us dollar without downplaying the importance of subsidy elimination the paper concludes that these impediments should receive high priority in the policy agenda

on the possibility and optimality of positive rent gradients abstract the assertion that externalities from low density can create positive residential rent gradients is examined in several cases optimal externality internalization zoning excessive and insufficient restriction and no internalization in all cases positive rent gradients are unlikely i e require land to be an inferior good unstable or impossible in addition easily interpretable welfare conditions are found as a result of consumer and social welfare maximization the alonso muth mills model is found to be quite robust

estimating the impact of transgenic bt cotton on west and central africa a general equilibrium approach summary west and central africa wca s cotton sector is experiencing rising production costs and lower yields reversing decades of growth declining input use soil fertility and inefficient chemical pest controls are contributing factors we evaluate the potential impact of bt cotton on wca using a multiregion general equilibrium model and multicountry estimates of bt induced productivity we find that bt cotton raises growers returns land value and welfare released labor from cotton is shifted to food crops hence reducing labor shortage constraints overall results indicate that potential gross benefits from bt cotton are substantial for wca cotton sector and that the economic costs of nonadoption are equally significant published by elsevier ltd