an experimental investigation of the hahn noll revenue neutral auction for emissions licenses abstract this paper reports on three series of laboratory experiments designed to test the performance of the hahn noll revenue neutral auction rna an alternative institution a no rebate uniform price auction upa is also examined as a benchmark in these experiments the rna markets were little different from upa markets in terms of either prices or market efficiencies the two institutions did differ in terms of the distribution of the gains from exchange and of the propensity of bidders to engage in a certain type of overbidding

equilibrium properties of auctions and alternative procedures for allocating transferable permits abstract this paper examines the equilibrium properties of a range of auctions and related procedures placing emphasis on the types of procedures that are likely to be of special interest in environmental management applications nash equilibrium properties are first derived for a very general class of auctions for multiple homogeneous or heterogeneous objects or permits next it is shown that given appropriate assumptions three broad classes of public allocation procedures that do not generate revenues for the government would yield participants equal expected profits these classes are 1 incentive compatible auctions where bidders receive equal lump sum refunds 2 non incentive compatible procedures where refunds are a function of participants bids and 3 free initial distribution of permits on a lump sum basis followed by trading via a competitive market the applicability of the general results is then demonstrated by examining the particular non incentive compatible fair division procedure originally suggested by knaster finally implications of the theoretical results for applications including the allocation of transferable discharge permits and water rights are discussed

information sharing in dea a cooperative game theory approach abstract in this paper a cooperative dea game is proposed based on the idea that different organizations can gain if they share data on the input consumption and output production of their processing units a larger data sample allows a more complete description of the production possibility set and consequently of the efficient frontier however since not all organizations will benefit in the same way it is convenient to use cooperative game theory in order to share the benefits of the cooperation the proposed cooperative dea game is shown to be subadditive and balanced models for computing the value of the game and checking its stability taking into account the exponential number of coalitions that exist when the number of organizations is large are also presented the approach is illustrated with a dataset from the literature

using contests to allocate pollution rights in this paper we advocate a new initial allocation mechanism for a tradable pollution permit market we outline a permit allocation contest pac that distributes permits to firms based on their rank relative to other firms this ranking is achieved by ordering firms based on an observable external action where the external action is an activity or characteristic of the firm that is independent of their choice of emissions in the tradable permit market we argue that this mechanism has a number of benefits over auctioning and grandfathering using this mechanism efficiently distributes permits allows for the attainment of a secondary policy objective and has the potential to be more politically appealing than existing alternatives

a buyer seller game model for selection and negotiation of purchasing bids extensions and new models abstract a number of efficiency based vendor selection and negotiation models have been developed to deal with multiple attributes including price quality and delivery performance the efficiency is defined as the ratio of weighted outputs to weighted inputs by minimizing the efficiency talluri eur j operat res 143 1 2002 171 proposes a buyer seller game model that evaluates the efficiency of alternative bids with respect to the ideal target set by the buyer the current paper shows that this buyer seller game model is closely related to data envelopment analysis dea and can be simplified the current paper also shows that setting the ideal target actually incorporates implicit tradeoff information on the multiple attributes into efficiency evaluation we develop a new buyer seller game model where the efficiency is maximized with respect to multiple targets set by the buyer the new model allows the buyer to evaluate and select the vendors in the context of best practice by both minimizing and maximizing efficiency the buyer can obtain an efficiency range within which the true efficiency lies given the implicit tradeoff information characterized by the targets the current study establishes the linkage between buyer seller game models and dea such a linkage can provide the buyer with correct evaluation methods based upon existing dea models regarding the nature of bidding

ethical influences on the evolution of the us tradable permit approach to air pollution control abstract in 1975 a novel approach to air pollution control was implemented in the usa from this rather humble beginning this approach has now been expanded rather dramatically in several different directions this paper describes this evolution shows how the design of the system has been adapted to accommodate ethical concerns and describes how the latest versions of this approach have transformed the regulatory process which spawned the approach in the first place

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

the price of wealth business and state in labor remittance and oil economies this article contrasts the effects of state controlled oil revenues and privately controlled labor remittances on institutional development state capacity and businessgovernment relations in saudi arabia and the yemen arab republic these two countries represent extreme cases of dependence on external capital in deeply divided societies presided over by fragile emerging bureaucracies by tracing the two cases through a pattern of economic boom 1973 83 and recession 1983 87 the study demonstrates that the type volume and control of capital inflows decisively influence the relative development of the bureaucracy s extractive distributive and regulatory capacities and affect the ability of the state to respond to economic crisis in both cases external capital inflows precipitated the decline of extractive institutions however oil revenues and labor remittances had divergent effects on businessgovernment relations and this circumscribed the state s ability to implement austerity programs during the recession during the crisis the saudi government s efforts to cut subsidies to the private sector and to implement extractive policies were blocked by the state sponsored merchant class in contrast the yemeni government instituted a thoroughgoing austerity package that targeted the independent merchant class in both cases external capital inflows did not augment the efficacy of those that controlled them these paradoxical outcomes are explained by tracing the different effects of oil revenues and labor remittances on the distribution of economic opportunity in the public and private sectors and the resulting effects on the regional tribal and sectarian composition of the bureaucracy and the commercial class

non cooperative negotiation strategies for vendor selection vendor selection decisions are typically multi objective in nature in an environment of competing vendors for a product or service some vendors are selected and some are not this paper describes three approaches for the selection and negotiation with vendors who were not selected furthermore it describes how in certain situations two multi criteria analysis tools multi objective programming and data envelopment analysis can be used together for this selection and negotiation process the paper describes non cooperative vendor negotiation strategies where the selection of one vendor results in another being left out of the solution

organizing emissions trading the barrier of domestic permit allocation abstract this paper uses a barrier model of politics to analyse the issue of permit allocation as a major political obstacle to organizing inter national greenhouse gas emissions trading it is argued that permit allocation constitutes a barrier because among other things various types of emitters have conflicting interests in trying to lobby for as much allocated permits as possible and because international differences in domestic permit allocation procedures are perceived to potentially distort inter firm competitiveness relations permit allocation is circumvented by applying intergovernmental or project based emissions trading the project approach is preferable in particular because it avoids the trading of hot air

oil wealth and regime survival in the developing world 1960 1999 the global oil market and its associated booms and busts have generated a large literature in political science one contention in this literature is that political instability is a near certain long term outcome of oil wealth another line of argument maintains just the opposite that oil makes authoritarian regimes stronger by funding patronage and repressive apparatuses in this article i conduct the first cross national tests of these arguments and investigate the effects of oil wealth and the oil booms and busts on political stability drawing on data from 107 developing countries between 1960 and 1999 i estimate the effects of oil wealth on regime failure antistate social protest and domestic armed conflict thus as a first goal this article addresses an analytic shortcoming in previous studies by separating regime survival empirically from both economic policy and regime type democratic or authoritarian and by focusing on the direct effects of oil wealth on several measures of political stability i address the relationship between oil wealth and these outcomes both by comparing exporters to the rest of the developing world and by comparing oil rich states across pre boom boom and bust periods the results indicate that oil wealth is robustly associated with more durable regimes and significantly related to lower levels of protest and civil war moreover

economic development inequality war and state violence abstract this paper focuses on a political economy of humanitarian emergencies comprising a human made crisis in which large numbers of people die from war and state violence the article analyzes how economic decline income inequality pervasive rent seeking by ruling elites a reduced surplus to threaten the survival income of a large portion of the population a weakening state and competition for control of mineral exports contribute to emergencies economic regress and political decay bring about relative deprivation or perception by influential social groups of injustice arising from a growing discrepancy between what they expect and get

the optimal initial allocation of pollution permits a relative performance approach the initial allocation of pollution permits is an important aspect of emissions trading schemes we generalize the analysis of bohringer and lange 2005 eur econ rev 49 8 2041 2055 to initial allocation mechanisms that are based on inter firm relative performance comparisons including grandfathering and auctions as well as novel mechanisms we show that using firms historical output for allocating permits is never optimal in a dynamic permit market setting while using firms historical emissions is optimal only in closed trading systems and only for a narrow class of allocation mechanisms instead it is possible to achieve social optimality by allocating permits based only on an external factor which is independent of output and emissions we then outline sufficient conditions for a socially optimal relative performance mechanism

whose greed whose grievance and whose opportunity effects of foreign direct investments fdi on internal conflict abstract this paper investigates the influence of foreign direct investments on the probability of civil conflict onset contributing to the debate on globalization and civil conflict i relax the common assumption that all forms of globalization are equivalent in their effects on civil conflict i also incorporate the cross sectoral heterogeneity of investments in existing arguments about the socioeconomic externalities of foreign direct investments as determinants of conflict with long time horizons and managerial control of their foreign affiliates foreign direct investors are strategic players aiming to maximize profits and uniquely able to alter their environment through socio political channels this distinguishes fdi from trade and foreign portfolio investments through a combination of political agency and socio economic influences on grievance and greed among domestic groups some types of fdi are likely to alleviate the risk of civil conflict service sector fdi while others exacerbate it primary sector fdi analyses using a new data set of sector specific fdi stock 1980 2013 lend empirical support to the argument showing that economic globalization can have simultaneous positive and negative externalities these findings are informative for the current dialogue on the role of global markets in sustainable development

the us so2 auction analysis and generalization abstract the new acid rain program allows electric utilities all over the us to trade so 2 emission permits an annual discriminative and revenue neutral auction is linked to this program this innovative so 2 auction distributes 3 of the permits in circulation and takes place at the chicago board of trade early results showed that the auction generated a clearing price signal lower than the market price now the auction price seems to be determined by the outside market price still in the important starting phase a non discriminative auction design would probably have generated better price signals since potentially severe downward biases in both seller price offers and buyer bids are due to the discriminative feature of the epa auction

natural resources and the quality of economic development abstract are natural resources a blessing or a curse for human development this article attempts to answer the question by distinguishing between a dependence on natural resources and an abundance of the same dependence is measured in terms of exports of metals and fuel while resource abundance is calculated on the basis of the subsoil assets per square kilometre and per capita results show the existence of a negative correlation between metals and ore exports and human development while subsoil assets measures are rather positively related these effects are particularly significant in countries with a comparatively lower institutional quality the cases of botswana the democratic republic of congo and equatorial guinea briefly examined suggest however that the effects of natural resources on human and economic development can be very different and strictly related to specific national political and institutional characteristics

priority pollution rights adapting pollution control to a variable environment evidence suggests that a priority pollution rights system has much greater flexibility and makes more efficient use of privately held technological and cost information than alternative instruments of control in adapting pollutant discharge rates to variations in the assimilative capabilities of the environment possibilities of undesirable forms of strategic behavior in the market warrant further investigation but such possibilities exist under all instruments successful experience with priority water rights in the western united states bodes well for similar systems in the field of pollution control 13 references 1 figure

papers in experimental economics competitive market institutions double auctions vs sealed bid offer auctions consider a market with the following characteristics 1 privacy that is each agent knows only his own valuation or cost conditions 2 exchange follows the rules of the oral double auction that is buyers freely announce bids or accept offers and sellers freely announce offers or accept bids 3 aggregate market supply and demand per trading period is stationary for at least two to three periods and 4 there are at least four buyers and as many sellers the literature reporting the results of a large number of experimental markets with these characteristics documents what appears to be a remarkably rapid convergence to a competitive equilibrium ce however any claim of double auction da convergence to the ce can only have meaning in one of three senses i the ce is attained immediately ii after t periods of trading some measure of the market s state such as mean price is nearer relative to experimental sampling variability to a ce than to some distinct alternative equilibrium such as a monopoly or nash equilibrium iii after t periods of trading this measure is nearer to a ce in da experimental markets than in markets organized under a different institution of contract for example a sealed bid auction since everything from electrons and the stars to rats and people yield state measures subject to error or random variation the deterministic criterion i can have no serious scientific standing by such criteria any hypothesis can be rejected and there could be no science of physics biology or economics 2 with the exception of certain very simple markets such as single object auctions or certain idealized markets such as the cournot quantity adjuster model economics has only two concepts of equilibrium monopoly and competitive the only formal model of da trading that has been proposed see david easley and john ledyard p 6 predicts stochastic convergence in finite time with probability one to a ce hence the only test alternative to the ce research hypothesis in da markets is a monopoly or monopsony equilibrium experimentalists have not reported statistical tests of the ce professor department of economics university of arizona assistant professor department of economics indiana university instructor department of economics university of arizona and sandia national laboratories albuquerque nm respectively we are indebted to the national science foundation for research support and to art denzau and mort kamien for helpful comments there is an early and recently growing body of experimental evidence for convergence to a competitive equilibrium under double auction rules the earliest evidence contained in experiments initiated in january 1956 is reported in smith 1962 1964 1965 1976 however these early experiments used between twenty and fifty or so participant buyers and sellers because in keeping with prevailing professional beliefs it was thought that a ce was unlikely to be approached unless numbers were quite large using large numbers was not unreasonable since it is a good beginning procedure to give a theory whatever is believed to be its best shot more recent evidence using six buyers six sellers and two traders in speculative da markets with cyclical demand is reported by r m miller charles plott and smith and williams 1979 for evidence from a comparison of oral and computerized da experiments with four buyers and four sellers see williams 1980 for further evidence in the context of the study of price controls see m isaac and plott 1981b and smith and williams 1981b in the context of a conspiracy study see isaac and plott 1981a in the context of comparisons between da and posted offer pricing see jon ketcham smith and williams in the context of a study of four variations on da rules see smith and williams 1980 all of these more recent papers report double auction experiments using no more than four buyers and four sellers 2as frederick mosteller once noted if you wanted to reject the inverse square law of attraction try tossing a sheet of paper out the window

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

paying for pollution permits and charges tradeable emission permits are becoming an increasingly important instrument for controlling emissions for a variety of reasons emission permits are often allocated gratis conferring a windfall gain on the first generation of permit holders this paper examines how a regulator may capture this rent four different methods of rent capture profit output and input charges and an emission permit rental charge are compared with respect to their effects on efficiency and the relative burden placed on cleaner and dirtier firms in addition to generating revenue for the regulator certain charges coupled with emission permits may result in a better instrument than permits alone

risk and resilience in the nigerian oil sector the economic effects of pipeline sabotage and theft abstract political unrest in the niger delta has long been viewed as a hurdle for extracting maximum value from nigeria s oil resources recently investors and policymakers have laid blame for sector under performance on pipeline sabotage and theft and sounded the alarm for an impending oil crisis however our understanding of the economic effects of social action against oil companies is incomplete rigorous analysis has not heretofore been offered as evidence for such dire futures despite the obvious risk of pipeline interdiction price dynamics and aggregate production respond minimally to pipeline interdiction based on quantitative analysis of the relationship among price production and pipeline interdiction from multiple data sources covering different time intervals monthly data from 2005 to 2014 and annual data from 1999 to 2013 we find no evidence of significant effects of pipeline interdiction on production and a weak relationship between pipeline interdiction and bonny light crude prices reported losses in product are substantial but there is no evidence of statistically significant impacts on price or production in the aggregate explanations for this counterintuitive result are cast in terms of sector resilience the implications of this finding for producer risk and the likelihood of an impending oil crisis are discussed

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

auctions and alternative procedures for allocating pollution rights this paper considers two different types of auctions which the government could use to sell discharge rights 1 an auction where rights are sold for a single clearing price and 2 a special type of discriminating auction that discourages strategic manipulation of bids by individual dischargers based on both theoretical and practical considerations there appears to be a fundamental trade off between reducing the financial burden of rights purchases and eliminating the incentives for strategic behavior very few discharges in either case study would have lower expenses under government sales of rights than under uniform treatment the simulations also suggest that there may be opportunities for strategic behavior under nonincentive compatible procedures because of small numbers of dischargers despite its problems with respect to incentive compatibility the right allocation approach of free distribution followed by exchange may offer the most desirable package of features this approach can yield dischargers savings over the expenses of present uniform regulations as well as provide incentives for efficient allocation of treatment efforts 25 references 1 figure 5 tables

marketable emission permits efficiency profitability and substitutability research on marketable emission rights as a mechanism for controlling pollutants in the environment has intensified in recent years the resurgence of interest in this mechanism is in no small measure due to the 1990 amendments of the u s clean air act which introduced the most comprehensive tradeable permit scheme to date for s02 emissions canada is also flirting with the possibility of following suit with for instance the government of ontario now allowing ontario hydro to conduct some limited emissions trading across its plants nera 1992 however the literature often ignores two basic questions how permits are allocated and what substances should be covered by the permits there are two ways of allocating pollution permits by selling them e g by auction or by giving them away the advantages of auctions are that they can generate sizeable revenues for the regulator and they conform to the widely endorsed principle of polluter pays a frequently cited problem with auctions however is that they impose immediate financial burdens on emitting firms in the absence of perfect capital markets these burdens erect a formidable entry barrier to new and existing firms thus permits are usually freely distributed on the basis of historical market share however by allocating permits gratis policy makers are ignoring both the important polluter pays principle as well as an important source of revenue generation for example should emission permits be used to reduce nitrogen oxide emissions in accordance with recent canadian government proclamations the total value of these permits in ontario alone could be as much as c 300 million nera 1992 in this paper we examine the effects on efficiency and the burden imposed on heterogeneous firms from rent capture when permits are allocated gratis

resource wealth democracy and mobilisation abstractthe impact of resource wealth on society remains highly contested in the literature some perspectives suggest that resource wealth is associated with political apathy while others indicate that resource wealth fosters violent civil conflicts we leverage these seemingly contradictory impacts of natural resources on society by expanding the scope of inquiry to explore different types of resource wealth oil and minerals as well as other dimensions of political life protest utilising a global dataset for the period 1950 2006 we test the impact of resource wealth on mobilisation we find that while oil wealth demobilises citizens in all regime types mineral wealth strongly correlates with higher levels of mobilisation in democracies though not in autocracies in addition using survey data we examine individual level attitudes toward protest participation in two resource rich states peru and ecuador the results indicate that an individual living in a mineral rich country like peru is more

transaction costs and tradeable permits abstract tradeable permit systems are at the center of current interest and activity in market based reforms of environmental policy because these systems can offer significant advantages over conventional approaches to pollution control unfortunately claims made for their relative cost effectiveness have often been exaggerated transaction costs which may be significant in these markets reduce trading levels and increase abatement costs in some cases equilibrium permit allocations and hence aggregate control costs are sensitive to initial permit distributions providing an efficiency justification for politicians typical focus on initial allocations

taxes versus tradable discharge permits a review in the light of the u s and european experience the u s and west european environmental protection programs have incorporated different economic instruments for controlling pollution the u s has made extensive use of tradable permits of several forms but has never used direct pollution taxes the countries of the european community have long used an array of pollution taxes but have never used tradable permits a review and critique of these experiences and an analysis of the attributes of taxes and tradable permits seeks identify the strengths and weaknesses of each instrument and to provide guidelines for the successful implementation of each system

oil abundance and violent political conflict a critical assessment abstract this paper addresses one of the empirical claims of the resource curse argument namely that oil abundance raises the probability of political violence i argue that the two main theoretical premises of the oil civil war link rent seeking and the rentier state model fail to provide a convincing argument as to why oil economies are more vulnerable to the onset of civil war i find that three often mentioned mechanisms as to why oil economies succumb to political violence not convincing that oil economies are poor economic performers that oil economies generate high corruption and that oil economies tend to produce authoritarian regimes i also examine the empirical evidence on the oil civil war link and conclude that the results are not robust i conclude with some policy implications

selecting permit allocation rules for agricultural pollution control a bargaining solution abstract one of the primary justifications for using transferable permits for pollution control is that they achieve a given level of emission reduction at the lowest cost although the initial allocation of pollution permits may have no impact in terms of efficiency it does have a significant impact on equity in this paper we examine a variety of permit allocation rules for a small catchment in south west england an asymmetric nash bargaining framework is employed to characterise agents co operative behaviour and to explain their likely preferences over permit allocation rules the results indicate that the preferred allocation scheme depends upon the relative bargaining power of the agents furthermore some potential links between ex ante and ex post equity criteria were also discussed

exclusionary manipulation of markets for pollution rights abstract strategic price manipulation can affect the distribution of transferable pollution rights across polluters and the efficiency of pollution control efforts prior research has concentrated on market manipulation by firms seeking only to minimize the sum of pollution rights costs and pollution abatement costs in this paper we explore the potential for the exclusionary manipulation of pollution permit markets intended to drive up the costs of one s rivals and we distinguish between the resource allocation effects of exclusionary manipulation and cost minimizing manipulation we find that exclusionary manipulation can sometimes worsen and sometimes ameliorate the abatement inefficiency which occurs under cost minimizing manipulation and that an overbuying rule can obviate or at least limit damages from this form of strategic behavior

determination of paths to vendor market efficiency using parallel coordinates representation a negotiation tool for buyers abstract this study demonstrates the use of data envelopment analysis for measuring vendor performance and efficiency an algorithm by inselberg is employed for determining points of vendor efficiency on multiple criteria this study then demonstrates how parallel coordinates graphical representation can be used to display the efficiency of vendors on multiple criteria and in so doing visually identify benchmark values on these criteria for negotiating with inefficient vendors an example of a firm purchasing in a jit manufacturing environment is used to illustrate this approach the results of this approach point to its flexibility for use in vendor negotiations

reflections on the double dividend debate we survey the history of carbon taxation the range of market based instruments mbis of environmental control and the state of the double dividend debate in order to suggest directions for future research into mbis returning mbi revenues as lower distortionary taxes rather than as lump sums raises aggregate welfare but we favour mbis which raise little or no revenue for reasons of political acceptability to interest groups at the same time the overall case for any environmental improvement is weaker because of general equilibrium interactions with prior distortionary taxes research seems most necessary on quantifying the efficiency benefits of market control of heterogeneous polluters the benefits of environmental improvement the tax interaction effect and the various information costs of an mbi all on a case by case basis for different pollutants and places

market power and transferable property rights the appeal of using markets as a means of allocating scarce resources stems in large part from the assumption that a market will approximate the competitive ideal when competition is not a foregone conclusion the question naturally arises as to how a firm might manipulate the market to its own advantage this paper analyzes the issue of market power in the context of markets for transferable property rights first a model is developed that explains how a single firm with market power might exercise its influence this is followed by an examination of the model in the context of a particular policy problem the control of particulate sulfates in the los angeles region

bargaining rules for a thin spot water market markets for water rights have long been advocated to resolve user conflicts and to improve efficiency trelease 1961 hartman and seastone 1970 the potential for efficiency gains from market allocation of water has been well established burness and quirk 1979 eheart lyon and wong 1983 moore 1986 almost all studies of water markets address the transferability of long term water rights i e base or property rights eheart et al 1983 lyon 1986 saliba bush and martin 1987 crouter 1987 however rental or spot markets for water can improve efficiency by allowing allocational adjustments in line with changing conditions without disturbing the base rights system exchanges of either base rights or spot rights that entail a change in the point of diversion may result in third party effects even in the absence of return flow problems johnson gisser and werner 1981 eheart et al 1983 2 such third party effects place practical limits on the geographic scope of water exchanges and result in a thin market i e a market with few eligible participants thin markets are likely to be manipulated by participants leading to inefficiency unless suitable bargaining rules are designed to counter market manipulation the efficiency gains from water exchanges cannot be fully realized this paper uses multilateral bargaining models based on a game theoretic approach to address bargaining rules that will facilitate the efficient operation of a thin water market across a variety of bargaining environments institutional features such as the size of the water market the water rights system the distribution of farm sizes and the level of participants information define the bargaining environment the models are translated into computer simulations based on data representing irrigation water demand in the crane creek watershed of kankakee county illinois thin water markets are likely to be the rule rather than the exception especially in the u s west where many streams with insufficient flows are fully or overappropriated given this fact it is crucial to investigate how the efficiency of a thin water market is affected by the relative bargaining strengths of the participants and to suggest suitable bargaining rules that could improve the social gains achieved in thin water markets

assessing adjustment in africa abstract in 1994 the world bank issued a report on structural adjustment adjustment in africa in which it was argued that orthodox macroeconomic management represented the road to economic recovery for the sub saharan countries this article demonstrates that with its heavy emphasis upon macroeconomic policy bank policy shifts from structural adjustment to stabilization second the statistical evidence presented by the bank is analyzed and shown to be neither convincing nor internally consistent finally an alternative approach to adjustment stabilization is proposed and subjected to statistical testing

economic instruments for environmental regulation our knowledge about economic incentive approaches to pollution control has grown rapidly in the two decades in which they have received serious analytical attention not only have the theoretical models become more focused and the empirical work more detailed but we have now had over a decade of experience with emissions trading in the u s and emission charges in europe as the world community becomes increasingly conscious of both the need to tighten environmental controls and the local economic perils associated with tighter controls in a highly competitive global marketplace it seems a propitious time to stand back and to organize what we have learned about this practical and promising approach to pollution control that may be especially relevant to current circumstances this paper draws upon economic theory empirical studies and actual experience with implementation to provide a brief overview of some of the major lessons we have learned about two economic incentive approaches emissions tradi copyright 1990 by oxford university press

dynamic efficiency in experimental emissions trading markets with investment uncertainty this study employs a laboratory experiment to assess the performance of tradable permit markets on dynamic efficiency arising from cost reducing investment the permit allocation rule is the main treatment variable with permits being fully auctioned or grandfathered the experimental results show significant investment under both allocation rules in the presence of ex ante uncertainty over the actual investment outcome however auctioning permits generally provides stronger incentives to invest in r d leading to greater dynamic efficiency compared to grandfathering

enforcing transferable permit systems in the presence of market power we derive an enforcement strategy for a transferable permit system in the presence of market power that achieves complete compliance in a cost effective manner we show that the presence of a firm with market influence makes designing an enforcement strategy more difficult than enforcing a perfectly competitive system we also re consider hahn s 1984 suggestion that a firm with market influence should be allocated permits so that it chooses to not participate in the permit market when enforcement and its costs are taken into account hahn s suggestion does not hold except in a very special case the presence of market power will limit the extent to which transferable emissions permit systems can fulfill their theoretical promises hahn 1984 was the first to show that permit trading in the presence of market power cannot be expected to result in a distribution of emissions that minimizes aggregate abatement costs furthermore the distribution of emissions will never be completely independent of the initial allocation of permits modeling a transferable permit system in which one firm has market power while the rest are perfect competitors a dominant firm competitive fringe model hahn demonstrated that aggregate abatement costs are minimized only when the dominant firm is allocated exactly the number of permits it will choose to hold in equilibrium simply aggregate abatement costs are minimized only when a firm that can manipulate the permit price does not because it chooses to not trade permits like most of the theoretical literature on transferable permit systems hahn ignored the fact that compliance in a permit system must be enforced recognizing this important omission van egteren and weber 1996 extended hahn s work to

blood and debt war and taxation in nineteenth century latin america using data from 11 latin american countries this article challenges the universality of the positive relationship between war and state making availability of external resources state organizati