corruption and government size a disaggregated analysis using annual state level data over 1983 1987 this paper examines the effect of government size on corruption by public officials by including both demand and supply side incentives for engaging in corrupt practices our objectives are twofold first we assess the relationship between the incidence of corruption and overall measures of the size of the federal government and the state local sector in each state second we explore what kinds of government activities are more likely to be successful in deterring abuse of public office our results are generally supportive of becker s crime and punishment model regarding the primary focus of the paper our results show that government size in particular spending by state governments does indeed have a strong positive influence on corruption

more on measuring budget related rent seeking a comment following the work of tuuock 1967 kreuger 1974 and posner 1975 the theory of rent seeking has become a well established part of economics in a recent paper we katz and rosenberg 1989 offered a measure of the rentseeking associated with government spending basing himself on our work scully 1991 presents further results relating to such rent seeking and makes two claims first that our measure is a conceptually incorrect evaluation of the rent seeking associated with government expenditure and second that the measure of rent seeking suggested by him and into which our measure is an input is a meaningful and appropriate estimate of such rent seeking while reading scully s paper we realized that he touches upon a matter whose importance goes far beyond his offered measure this issue concerns the extent of rent seeking that takes place in given periods of time is there rentseeking for everything in every period or does the rent seeking occurring at any point in time mainly involve struggles over m i n o r reallocations of property rights the answer to this question has crucial implications for the amount of waste which occurs through rent seeking activities if rent seeking is always for everything rent seeking waste is likely to suck up a large proport ion of gnp in each period in this view rent seeking constitutes something like an economic black hole which threatens all economic well being if on the other hand rent seeking involves minor adjustments then while it reduces economic welfare rent seeking does not devour the benefits of a major proport ion of economic activity

rent seeking in u s government budgets 1900 88 a measure of waste from the competitive rent seeking activity of special interest groups in federal state and local budgets was calculated over the period 1900 88 this period in u s fiscal history is characterized by constitutional changes that have made for more transparency in governmental fiscal activities and for greater diffusion of taxes the xvi amendment to the constitution created the progressive individual income tax the corporate income tax was judged to be an excise tax in 1909 and passed the test of constitutionality high marginal tax rates are a justification for a high average level of taxation the full employment act of 1946 insitutionalized government deficits as a means of meeting a political objective as a result opportunities for rent seeking through budgetary reallocations rose in the united states in the first two decades of the 20th century waste at all levels of government represented about 10 percent of incremental national output today waste is three times that amount the transparency and diffusion of taxes are highest at the federal level and least at the local level rent seeking through budgetary reallocation has followed the public purse one explanation for the observed centralization of government in the 20th century may be that opportunities to concentrate benefits and diffuse taxes are highest at the federal level finally the withdrawal of resources from the productive economy to pursue rent seeking in government budgets lowers the rate of real economic growth i find that rent seeking through budget reallocations has had a significant and large negative effect on the growth rate

efforts in two sided contests the degree of rent dissipation is studied in extended two sided contests that in volve two types of efforts while usual contestants expend resources in trying to win the contested prize potential recipients of the rent seeking efforts also participate in the con test this is due to uncertainty regarding the source of power in the contest that induces the bureaucrats to expend resources to increase their share in the rent seeking efforts by try ing to appear as the party controlling the allocation of the prize we show that the existing theoretical and empirical studies are incomplete and may underestimate the extent of rent dissipation

measuring the costs of children an alternative approach abstract the cost of a child or the general equivalence scale as it is more commonly known is a concept of considerable importance in matters relating to public policy and welfare it has played a crucial part in numerous theoretical and empirical studies relating to poverty income distribution dietary needs income maintenance programs supplementary and child benefits and other forms of social security payments in a welfare state and in assessing the horizontal equity of income taxation in spite of a long tradition of estimating the scale from observed household budget data there remain severe problems in estimation and interpretation of the scales this paper proposes a new methodology for calculating the scale using a framework which is consistent with utility theory and which overcomes the identification problem without having to enforce the arbitrary prior assumptions of recent studies the proposed method allows easy calculation of not only the basic scale parameter but also how it varies with price and reference utility we illustrate the usefulness of the procedure by estimating on u k budget data at two different levels of aggregation and employing two sets of quite different functional forms the results are plausible compare favourably with one another and hence confirm the robustness and usefulness of the proposed procedure

rent seeking for budgetary allocation preliminary results for 20 countries in this paper we present quantitative measures of the proneness of different countries to respond to pressure groups in determining the composition of their spending these in turn help us to derive simple measures of the rent seeking done in relation to the government s spending pie

increasing returns and competitive equilibrium the content and development of marshall s theory this paper reviews alfred marshall s attempts to reconcile increasing returns and competition from the early economic writings to the later editions of his principles it is shown that while marshall s final solution to the problem involved naming external economies the cause of increasing returns in a regime of competition both the life cycle of the firm and internal economies remained necessary to his argument their function was to give some operation al content to the elusive concept of external economies copyright 1992 by oxford university press

economics and the self organisation approach alfred marshall revisited the economics of alfred marshall is reassessed in the light of new developments in the natural sciences whereby a nonequilibrium thermodynamic approach is adopted to analyze self organization in dissipative structures it is argued that there is a clear correspondence between marshall s treatment of time irreversibility and this modern approach particularly when the latter is set in an informational context thus his principles is viewed as a very useful starting point in adapting the self organization approach for application in economics the main features of such a post marshallian approach to economics are discussed and compared with the mechanical approach of neoclassicism copyright 1993 by royal economic society

do neoliberal policies deter political corruption this article probes the relationship between neoliberal economic poli cies and political corruption focusing in particular on the impact of trade and invest ment policies regulatory policy and the overall size of the public sector on corruption using a large cross national data set from the mid to late 1990s we test the neolib eral hypotheses that market oriented economic policies are associated with lower lev els of political corruption and state intervention in the economy with higher levels consistent with the neoliberal argument we find that open trade and investment pol icies and low effective regulatory burdens do correlate with lower levels of political corruption however we find no consistent relationship between the aggregate size of the public sector and political corruption while the neoliberal hypothesis on polit ical corruption has initial empirical support its lessons cannot be applied wholesale market oriented states may be less corrupt but interventionist states as measured by public spending are not necessarily more corrupt

the policy analysis of child labor a comparative study the policy analysis of child labour c grootaert h a patrinos modelling the determinants of child labour c grootaert child labour in cote d ivoire k cartwright child labour in urban bolivia k cartwright h a patrinos child labour in the philippines c sakellariou a lall policies to reduce child labour c grootaert h a patrinos

the convergence of fiscal regimes and the decline of the tiebout effect i have argued that the spatial convergence of per capita incomes and income distributions lead to the spatial convergence of fiscal regimes and that convergence diminishes opportunities for tiebout type moves in the economy considerable empirical evidence confirms the hypothesis states with relatively low initial levels of taxation have had relatively higher growth rates of taxation low per capita income states have had higher growth rates of real per capita incomes than have had high per capita income states the high economic growth rate states have had lower growth rates of taxation than the low income growth rate states spatial convergence of per capita incomes is associated with spatial convergence of fiscal regimes furthermore there has been a spatial convergence in income distributions increased equality of income empirically is associated with increased size of the fiscal regime confirming the public choice insight the spatial convergence of fiscal regimes has diminished the gains from tiebout type moves as such fiscal convergence diminishes the opportunity for citizen voters to reveal their preference for collective goods through migration of course at the limit where per capita incomes and the income distribution are invariant spatially the spatial convergence of fiscal regimes makes the musgrave samuelson problem of revealed preference for collective goods as intractable at the state and local levels as at the national level tiebout type moves no longer allow escape from leviathan

marshall s theory of value the role of external economies the view that marshall relied upon the assumption of external economies in his attempt to reconcile the existence of competition and decreasing long run average costs continues to attract many supporters however it is argued here that in marshall s writings external economies were to play only a very minor role in the reconciliation exercise subsequent writers emphasis on the role of external economies is shown to reflect a lack of understanding of the object of marshall s as opposed to the marshallians reconciliation problem

the empirical measurement of rent seeking costs this survey focuses on the efforts carried out mainly by public choice scholars to measure the social cost of rent seeking the concept introduced by gordon tullock in 1967 and coined by anne krueger in 1974 is well known and accepted by the profession but its empirical measurement has fallen behind with respect to its theoretical formulation an often criticized lack in the literature although there are good general surveys none has specifically focused on reviewing the empirical efforts made to measure the phenomenon the purpose of this paper is to provide such a survey it could be said that the rent seeking concept has been fully integrated into economic jargon it is commonly used when some agent seeks to obtain an artificial transfer usually from government and covers all the actions efforts or expenses that the agent has to carry out to obtain the prize the key issue however is the possible social waste that arises in these situations the empirical efforts to measure such waste constitute the main purpose of this survey the concept of rent seeking was introduced by tullock 1967 although the term was first coined by krueger 1974 in a paper not related to the former in a recent paper tullock himself wrote of the history of the concept and the intellectual context within which it arose tullock 2003 starting with the pioneering work by harberger 1954 several studies were conducted during the 1950s in which the calculation of the social cost of monopolies and tariffs always gave the result of very modest figures the first response to these results was made by leibenstein 1966 and his x efficiency which refers to a hypothetical loss in efficiency due to the absence of competition shortly after leibenstein s paper appeared tullock argued that the deadweight costs of monopoly and tariffs understate the true social cost because the expenditures made to capture related rents have to be included so rectangles as well as harberger s triangles have to be included in the calculations let us see this argument once more figure 1 depicts the iconic tullock graphic analysis of rent seeking it represents the demand schedule d for a monopolized good where pm is the monopoly

cnild labors child schooling and their interaction with adult labor using data from peru and pakistan this article tests two hypotheses there is a positive association between hours of child labor and poverty and there is a negative association between child schooling and poverty both of these hypotheses are confirmed by the pakistani data but not by the peruvian data the reduction in poverty rates due to income from children s labor is greater in pakistan than in peru the nature of interaction between adult and child labor markets varies with the gender of the child and the adult in peru rising men s wages significantly reduce the labor hours of girls whereas in pakistan there is a strong complementarity between women s and girls labor markets both data sets agree on the positive role that increasing adult education can play in improving child welfare

the evolutionary firm and cournot s dilemma to transform this competence based approach into an evolutionary theory the con nection between the firm and veblen s concept of social knowledge is more fully devel oped once established the evolutionary theory of the firm is utilised to bypass marshall s reconciliation problem and solve cournot s dilemma

on the classical theory of competition this paper identifies some important theoretical issues remaining unresolved in the wake of piero sraffa s seminal work a central problem concerns the process of gravitation towards uniform profit rates and production prices stringent requirements for convergence and stability are discussed the issue of path dependence being regar ded as most basic other issues concern inter and intraindustry mechanisms of competition choice of technique and technical change and mechanisms of wage profit rate determination prospects for advancing a theory of differentiated profit rates that would be consistent with classical theory are examined against this background it is suggested that sraffa s contribution encompasses two theoretically distinct research programs copyright 1988 by oxford university press

the assumption of constant returns to scale nicholas kaldor was right to maintain that this assumption is unrealistic but that does not mean that it is useless there are propositions that can be proved assuming it which would never have been found without it but that look as if they are independent of it two examples 1 paul samuelson s factor price equalization theorem in international trade and 2 the author s theory of relations between factors in production elasticity of substitution in a modern form p and q substitutes complements must be distinguished weakly related factors are p substitutes and q complements this is the only case when no more than two factors are present otherwise two factors out of many may be strong substitutes substitutes both ways or strong complements complements both ways the excluded case when they would be p complements and q substitutes appears in the presence of scale economies to be excluded a fortiori copyright 1989 by oxford university press

the estimation of prewar gross national product methodology and new evidence the paper develops new methodology for the estimation of prewar gnp taps previously unused data sources and develops new estimates for the periods 1869 1908 and 1869 1928 primary among the new data sources are direct measures of output in the transportation communications and construction sectors and estimates of the consumer price index new measures of real gnp nominal gnp and the gnp deflator are developed the new estimates of real gnp are as volatile on average over the business cycle as the traditional kuznets kendrick series but dampen the amplitude of some cycles while raising the amplitude of others the new estimates of the gnp deflator are distinctly less volatile than the traditional series and in fact no more volatile than those in the postwar period

a comparative evaluation of sraffa s the laws of returns under competitive conditions and its italian precursor in his classic paper the laws of returns under competitive conditions piero sraffa 1926 p 535 noted that the opening pages of this article contain a summary of the con clusions of a paper which he wrote in italian with the title sulle relazioni fra costo e quantite prodotta sraffa 1925 it is my purpose here to compare the relative contri butions found in these two papers the first of which to the best of my knowledge has not appeared in english translation 1 sraffa s thesis that the marshallian partial equi librium analysis of prices and quantities is inadequate in the case of industries subject to variable costs acquires added stature from the clear and detailed exposition it received in his 1925 paper which also contains a critique of the analyses of variable returns of turgot j s mill cairnes edgeworth wicksteed pigou pantaleoni barone j n keynes and particularly marshall among others it is worthy of note that one of the major students and popularisers of sraffa s work a roncaglia holds the view that the 1925 article is today of greater interest for it concen trates on criticism of marshallian theory as well as providing diverse hints of great interest such as the analysis of spurious margins to which sraffa refers in the preface to production of commodities by means of commodities roncaglia 1978 p 19 2 roncaglia adds that the 1925 article greatly impressed the ageing edgeworth who as a co editor decided to invite sraffa to write a second article in the same vein for the