second mover disadvantages in a three player stackelberg game with private information abstract i consider a three player stackelberg game where each player has its private signal concerning stochastic demand i show that at a perfectly revealing equilibrium the second mover earns the lowest and the third mover the highest expected profit of the three i characterize this result by the strategic substitutes or complements relationships among three firms at the equilibrium journal of economic literature classification numbers c72 d82 and l13

a tale of two collectives sulphur versus nitrogen oxides emission reduction in europe a theoretical model of emission reductions is specified that accounts for voluntary and non voluntary behaviour regarding the adherence to the helsinki and sofia protocols which mandated emission reductions for sulphur s and nitrogen oxides nox respectively from this model we derive an econometric specification for the demand for emission reductions that adjusts for the spatial dispersion of the pollutant when tested for 25 european nations the model performs well for sulphur cutbacks less satisfying results are obtained for nox because the model s assumption of a unitary actor at the national level is less descriptive collective action considerations indicate that sulphur emissions are easier to control than those of nox

designing economic instruments for the environment in a decentralized fiscal system designing economic instruments for the environment when external effects are important markets will be inefficient and economists have considered several broad classes of economic instruments to correct these inefficiencies however the standard economic analysis has tended to neglect important distinctions and interactions between the geographic scope of pollutants the enforcement authority of various levels of government and the fiscal responsibilities of the levels of government for example externalities generated in a particular local area may be confined to the local area or may spill over to other jurisdictions also local governments may be well informed about how best to regulate or enforce pollution control within their jurisdiction but they may not consider the effects of their actions on other jurisdictions finally the existence of locally generated waste emissions affects the appropriate assignment of both expenditure and tax responsibilities among levels of government the standard analysis therefore focuses mainly upon an aggregate or national perspective it typically ignores the possibility that the externality may be created and addressed by local governments and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems this paper examines the implications of decentralization for the design of corrective policies that is how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services as well as to choose tax instruments that can both finance these expenditures and correct the market failures of externalities

agricultural growth landlessness off farm employment and rural poverty in the philippines one approach to economic development for less developed countries is to stimulate rapid agricultural growth the purpose of this investigation is to critically examine the progress in the philippines during the 1960s and 1970s in advancing agricultural and economic growth and alleviating poverty an international perspective is given as well as the historical record on income distribution and poverty some of the primary issues are identified with regard to access to land agricultural productivity and rural poverty also exposed are the links between access to employment opportunities and rural poverty alleviation the conclusion is reached that rapid agricultural growth has led to some decline in rural poverty in the philippines the extent of the decline is less than that for other asian countries the rural poor still constituted 54 of the total rural population in 1988 the absolute number of rural poor increased to 3 6 million in 1988 poverty is as intense among the self employed as among the wage dependent households the rural poor who are self employed are primarily comprised of lease holders tenants and small owner cultivators this group should be targeted for intervention programs due to their large population the root causes of rural problems are low productivity landlessness high underemployment and high incidence of rural poverty a comprehensive policy is needed in order to correct the disincentives to labor intensive production and expand employment opportunities sustained growth in agriculture must occur along with rapid employment in sectors outside of agriculture during the 1960s and 1970s rapid agricultural growth and the expansion of the service industry took place but without growth in the industrial sectors or alleviation of poverty although there was a rapidly expanding labor force productivity was low and underemployment high further research is needed on the expenditure patterns of rural households and the ability to meet demand an examination is needed of the impact of public policies on rural growth and income distribution

one leader and multiple follower stackelberg games with private information this study analyzes one leader and multiple follower stackelberg games with demand uncertainty we demonstrate that the weight on public information regarding a follower s estimation of demand uncertainty determines the strategic relationship between the leader and each follower when the relationship is strategic complement the leader can exit from a market the threshold is determined by the intensity of cournot competition among the followers

determinants and consequences of land reform implementation in the philippines abstract unlike the experience of other developing countries land reform in the philippines has been successful in converting many of share tenants to land reform beneficiaries this study indicates that the implementation of land reform is positively associated with yield growth made possible by the adoption of modern seed fertilizer technology a major reason underlying such association is considered to be an increased economic interest of tenants in land reform arising from divergence of rental value of land from leasehold rent and amortization fees prescribed by law

the voluntary provision of a pure public good the case of reduced cfc emissions and the montreal protocol abstract this paper applies the theory of the voluntary provision of a pure public good to the behavior of nations to curb chlorofluorocarbon cfc emissions during the late 1980s by devising an empirical test we determine that these cutbacks in emissions are consistent with nash behavior when taste parameters are controlled the relationship between emission cutbacks and national income is nearly linear as implied by the theory if the sample is purged of potential outliers then the linear relationship results a significant taste parameter is the extent of political and civil freedoms while a marginally significant parameter is geophysical position in terms of latitude

fiscal federalism and interjurisdictional externalities new results and an application to us air pollution abstract the economics of fiscal federalism has identified two book end departures from first best provision of a public good local governments may respond to local conditions but ignore inter jurisdictional spillovers alternatively central governments may internalize spillovers but impose uniform incentives ignoring local heterogeneity we provide a simple model that demonstrates that the choice of pricing policy also depends crucially on a third factor the shape of marginal costs of providing the public good if marginal costs are convex then marginal abatement cost elasticities will be higher around the local policies this increases the deadweight loss of those policies relative to the centralized policy ceteris paribus if they are concave then the opposite is true using a detailed simulation model of the us electricity sector we then empirically explore these tradeoffs for us air pollution we find that us states acting in their own interest lose about 31 5 of the potential first best benefits whereas the second best uniform policy loses only 0 2 of benefits the centralized policy outperforms the state policy for two reasons first inter state spillovers are simply more important that inter state heterogeneity in this application second because of the convexity of the marginal cost functions elasticities are much lower over the range relevant to the centralized policy dampening the distortions

commitment robust equilibria and endogenous timing abstract this paper investigates which equilibria of a game are still viable when players have the opportunity to commit themselves to that end we study a model of endogenous timing in which players face the trade off between committing early and moving late it is shown that mixed resp pure equilibria of the original game are subgame perfect resp persistent in the timing game only when no player has an incentive to move first consequently mixed equilibria are viable only if no player has an incentive to move first one needs strong evolutionary solution concepts to draw that conclusion for pure equilibria journal of economic literature classification number c72

land reforms poverty reduction and economic growth evidence from india recognition of the importance of institutions that provide security of property rights and relatively equal access to economic resources to a broad cross section of society has renewed interest in the potential of asset redistribution including land reforms empirical analysis of the impact of such policies is however scant and often contradictory this paper uses panel household data from india together with state level variation in the implementation of land reform to address some of the deficiencies of earlier studies the results suggest that land reform had a significant and positive impact on income growth and accumulation of human and physical capital the paper draws policy implications especially from the fact that the observed impact of land reform seems to have declined over time

first mover disadvantages with private information we consider a leader follower game with output quantities as strategies so as to demonstrate the reduced advantages of the stackleberg leader in a stochastic environment with private information at the equilibrium the strategy of the leader reveals to the follower information about the demand in an attempt to signal low demand the leader contracts his output nevertheless unless the leader s information is infinitely noisy the follower can always correctly infer his signal we find a wide range of parameter values over which the follower is better off compared to the leader

impact of food inflation on poverty in the philippines abstract we simulate the impact of food inflation between june 2006 and june 2008 on poverty across different areas and between agricultural and non agricultural households we explicitly treat the spatial heterogeneity in food inflation and the differences in consumption and production patterns across households by merging household expenditure survey and price datasets at the provincial level or lower although some of the poor agricultural households may have escaped poverty the poorest of the poor whether they are in an agricultural household or not are severely and adversely affected by the food inflation

can decentralized planning really achieve first best in the presence of environmental spillovers abstract it is generally accepted that decentralized policy choice in the presence of interjurisdictional spillovers is inefficient strikingly ogawa and wildasin 2009 find that in a model with heterogenous jurisdictions interjurisdictional capital flows and interjurisdictional environmental damage spillovers decentralized planning outcomes are equivalent to that under a centralized planner we first show the critical importance of two key assumptions no retirement of capital fixed environmental damages per unit of capital in obtaining this result second we consider a more general model allowing for capital retirement and abatement activities and show that the outcome of a decentralized market generally differs from the solution of a centralized planner s social welfare maximizing problem

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

consequences of the clean water act and the demand for water quality since the 1972 u s clean water act government and industry have invested over 1 trillion to abate water pollution or 100 per person year over half of u s stream and river miles however still violate pollution standards we use the most comprehensive set of files ever compiled on water pollution and its determinants including 50 million pollution readings from 240 000 monitoring sites and a network model of all u s rivers to study water pollution s trends causes and welfare consequences we have three main findings first water pollution concentrations have fallen substantially between 1972 and 2001 for example the share of waters safe for fishing grew by 12 percentage points second the clean water act s grants to municipal wastewater treatment plants which account for 650 billion in expenditure caused some of these declines through these grants it cost around 1 5 million 2014 dollars to make one river mile fishable for a year we find little displacement of municipal expenditure due to a federal grant third the grants estimated effects on housing values are smaller than the grants costs we carefully discuss welfare implications

trade openness and the changing water polluting intensity patterns of dirty and clean industrial sectors abstract this study analyzes the economic activity bod biochemical oxygen demand relationships of the so called dirty and clean water polluting industries during the period of 1995 2005 the results indicate that the economic activity environment trade off of dirty and clean industrial sectors has been altered during the period of study on average pollution intensive dirty industries in the poorer nations were found to benefit in terms of bod emissions from extra exports and openness to trade the opposite was true for clean sectors where increased trade openness seems to have contributed to a wider gap between poorer and richer nations pollution intensities with openness to trade skewing innovations away from the clean industries industrial sectors in which the poorer countries specialize the classical model of opening the economy and lifting barriers to technology adoption will not be enough to improve the poorer nations water quality policies that induce innovation by reducing the cost and increasing the return on innovation particularly on r d activities in which the poorer countries have a comparative advantage will be necessary in order to improve their economic activity environment relationship

the tragedy of the commons in international fisheries an empirical examination abstract historically all capture fisheries have proven hard to manage internationally shared stocks face an additional impediment to effective management previous fisheries studies estimate gains from cooperation for particular species or locations but evidence is lacking on the wider effect that international sharing has in relation to other variables that affect stock status this paper is an attempt to shed a broader light on the effect of sharing by identifying whether shared fish stocks are systematically more exploited i compile exploitation status biological and economic data into a unique two period panel of more than 200 fish stocks from around the globe with which i test the theoretical implications of sharing the empirical results from ordered category estimation suggest that shared stocks are indeed more prone to overexploitation

do states free ride in antitrust enforcement i introduction recent research has examined the role of state governments in the united states in antitrust enforcement over the past 20 years what has not been explored is the extent to which states make strategic decisions on their involvement in antitrust litigation in particular while most state antitrust cases involve purely local matters a significant number of these concern more than one state states then need to decide whether to invest in leading an investigation or letting other states take the lead and participating in some lesser role which includes simply signing on to a settlement we view the decision by a state to delay entry into antitrust litigation to be a type of free tiding behavior 1 in this paper we analyze this issue of free riding by states in antitrust activity ii previous literature one of the defining characteristics of a pure public good is the nonexcludability of the benefits from its consumption as benefits can be received by individuals without having to pay for the goods this nonexcludability creates the possibility for a free rider problem as a consequence of this free tiding behavior the private market cannot exact a price for this good and this may mean the private market will provide a suboptimal amount of the good free riders are usually used as justification for government intervention into the private market to allocate these so called public goods in order to correct the market failure while this behavior would seem rational it is not easily observed so the extent of free riding is not generally known researchers have employed experimental game evidence to measure the extent of free riding with results ranging from none to an extreme amount factors found in this literature that appear to decrease the degree of free riding behavior under certain conditions include smaller group size isaac walker and thomas 1984 experience through repeated game play fischbacher and gachter 2010 pregame communication among participants and an ability to exclude players from the group or other sanctions delmas and keller 2005 while the free rider problem and the experimental evidence have focused on private market decision makers it is straightforward to extend these behaviors to self interested governments one possibility is that governments reduce the amount of certain appropriations as a result of private contributions becker and linsday 1994 find a considerable degree of government free riding behavior in the context of appropriations to public higher education institutions an alternative source of free riding does not involve the private sector but is between government activities particularly those with significant spillover effects lee 1988 considers the issue of free riding among countries in their efforts devoted to fighting terrorism more recently sav 2010 finds a similar impact chati and kehoe 2007 provide a theoretical discussion of what they call a free rider problem among members of a monetary union in their fiscal and regulatory policies caused by an inability of the monetary authority to commit to their policies sigman 2002 finds that water pollution control is affected by the degree of spillovers crossing international borders somewhat closer to the focus of this paper konisky and woods 2010 investigate whether u s states free tide in environmental regulatory actions their results are somewhat mixed while they report some impact in reducing state enforcement of the clean air act in their counties adjacent to international borders they do not find this pattern in counties bordering other u s states a recent theoretical paper by choi and gerlach 2012 raises the concern that national antitrust enforcement in a global economy with multi market contact among exporters may be suboptimal due to free riding on the antitrust activity of other countries however no empirical evidence is provided

understanding china s urban pollution dynamics china s ongoing urban economic growth has sharply increased the population s per capita income lowered the count of people living below the poverty line and caused major environmental problems we survey the growing literature investigating the causes and consequences of china s urban pollution challenges we begin by studying how urban population and industrial growth impacts local pollution levels and greenhouse gas production as the urban population grows richer its demand for private transportation and electricity sharply increases such privately beneficial activity exacerbates urban pollution externalities facing these severe environmental challenges china s urbanites increasingly demand quality of life progress we survey the emerging literature investigating the demand for environmental progress in china progress in mitigating externalities hinges on whether the powerful central and local governments choose to address these issues we analyze the political economy of whether government officials have strong incentives to tackle lingering urban externalities we conclude by discussing future research opportunities at the intersection of environmental and urban economics jel o18 p25 p28 q53 r23 r41 r58

international spillovers and water quality in rivers do countries free ride transboundary spillovers may degrade environmental quality if countries free ride this paper examines the extent of such degradation in water quality in international rivers using data from river monitoring stations in the un s global emissions monitoring system gems it compares pollution levels in international and domestic rivers the results suggest that free riding may substantially increase pollution in international rivers but the estimates are sensitive to the inclusion of country effects this abstract was borrowed from another version of this item

the mdgs and exit time the case of the philippines this article evaluates whether the philippines will be able to halve the incidence of poverty between 1990 and 2015 using the concept of exit time and household level data we find that the philippines as a whole will not be able to comply with target 1 of the millennium development goals mdgs although 15 of its provinces will be able to do so these provinces are closer to manila characterized by higher per capita expenditure growth rates and had lower incidence of poverty in 1988 this suggests the importance of policies to mitigate the regional disparity in achieving the mdgs

growth inequality and poverty looking beyond averages the evidence is compelling that the poor in developing countries do typically share in the gains from rising aggregate affluence and in the losses from aggregate contraction but how much do poor people share in growth do they gain more in some settings than others do some gain while others lose does pro poor growth mean more or less aggregate growth recent theories and evidence suggest some answers but deeper microeconomic empirical work is needed on growth and distributed change only then will we have a firm basis for identifying the specific policies and programs needed to complement and possibly modify growth oriented policies

going beyond crosscountry averages growth inequality and poverty reduction in the philippines summary this paper analyzes the processes of growth and poverty reduction simultaneously under a neoclassical growth model framework using provincial data from the philippines we obtain a high rate of provincial income convergence and a tradeoff between equity and growth the lack of political competition inhibits growth land reform is positively associated with growth and poverty reduction while higher agricultural terms of trade facilitate poverty reduction the growth elasticity of poverty reduction is low by international standards but is sensitive to sectoral income composition and initial conditions in poverty incidence mortality rate and irrigation coverage

us and them the origin of identity and its economic implications we investigate the origins of identity and the innate proclivity to draw a distinction between insiders and outsiders we propose an evolutionary explanation we argue that identity arises because it facilitates survival in an evolutionary setting we endogenize preferences and demonstrate that the evolutionarily stable preferences fashioned by natural selection would draw a distinction between insiders and outsiders we then work out the implications of such preferences in two contemporary scenarios one entailing rent seeking behavior and the other involving public good provision our results are in conformity with empirical evidence

duopoly information equilibrium cournot and bertrand abstract in a duopoly model where firms have private information about an uncertain linear demand it is shown that if the goods are substitutes not to share information is a dominant strategy for each firm in bertrand cournot competition if the goods are complements the result is reversed furthermore the following welfare results are obtained 1 i with substitutes in cournot competition the market outcome is never optimal with respect to information sharing but it may be optimal in bertrand competition if the products are good substitutes with complements the market outcome is always optimal 2 ii bertrand competition is more efficient than cournot competition 3 iii the private value of information to the firms is always positive but the social value of information is positive in cournot and negative in bertrand competition

can environmental quality spread through institutions spatial relationships are known phenomena in ecological studies that refer to the relationships between certain variables observed in different localities different mechanisms have been suggested to explain this phenomenon such as the pollution displacement hypothesis foreign direct investment international trade and strategic response of countries to transboundary pollution flows this paper develops a new mechanism in the sense that environmental quality of countries spreads spatially to their neighbors through the spillover of the institutional quality of countries to test this hypothesis a panel data model is constructed that estimates the impact of the institutional quality of countries and their neighbors on their co2 emission intensity of energy use using data for 129 countries over the period 1980 2007 the findings prove the existence of this mechanism at the global and regional levels

environmental policy in majoritarian systems abstract this paper sheds new light on the determination of environmental tax policies in majoritarian federal electoral systems such as the u s and derives implications for the environmental federalism debate on whether the national or local government should have authority over environmental taxes in the absence of majority bias the socially preferred policy would be federal district level taxation which accounts both for cross boundary pollution and differences in industry concentration across districts in majoritarian systems however where the legislature consists of geographically distinct electoral districts the majority party at the national or state level favors home districts depending on the location of polluting industries and the associated damages the majority party may therefore impose sub optimally high or low pollution taxes due to a majority bias majority bias can influence the social welfare ranking of alternative environmental tax policies in some cases majority bias may make decentralized or federal uniform taxation the preferred solution

decentralization and pollution spillovers evidence from the re drawing of county borders in brazil decentralization can improve service delivery but it can also generate externalities across jurisdictional boundaries we examine the nature and size of water pollution externalities as rivers flow across jurisdictions panel data on water pollution in brazilian rivers coupled with county splits that change the locations of borders allow us to identify the spatial patterns of pollution as rivers approach and cross borders controlling for fixed effects and trends specific to each location the theory of externalities predicts that pollution should increase at an increasing rate as the river approaches the downstream exit border that there should be a structural break in the slope of the pollution function at the border and that a larger number of managing jurisdictions should exacerbate pollution externalities we find support for all four predictions in the data satellite data on growth in night time lights along rivers show that local authorities allow more settlements to develop close to rivers in the downstream portions of counties which is the likely underlying mechanism the border effects on pollution are not as pronounced when the cost of inter jurisdictional coordination is lower

growth inequality and politics revisited a developing country case abstract key issues in the empirical study on growth are addressed using provincial data in the philippines we find a high rate of absolute convergence a positive relationship between inequality and growth and a positive relationship between political competitiveness and growth

research needs and challenges in the few system coupling economic models with agronomic hydrologic and bioenergy models for sustainable food energy and water systems on october 12 13 a workshop funded by the national science foundation was held at iowa state university in ames iowa with a goal of identifying research needs related to coupled economic and biophysical models within the few system approximately 80 people attended the workshop with about half representing the social sciences primarily economics and the rest from the physical and natural sciences the focus and attendees were chosen so that findings would be particularly relevant to sbe research needs while taking into account the critical connectivity needed between social sciences and other disciplines we have identified several major gaps in existing scientific knowledge that present substantial impediments to understanding the few system we especially recommend research in these areas as a priority for future funding 1 economic models of decision making in coupled systems deliberate human activity has been the dominant factor driving environmental and land use changes for hundreds of years while economists have made great strides in modeling and understanding these choices the coupled systems modeling literature with some important exceptions has not reflected these contributions several paths forward seem fruitful first baseline economic models that assume rationality can be used much more widely than they are currently moreover the current generation of iams that include rational agents have emphasized partial equilibrium studies appropriate for smaller systems to allow this approach to be used to study larger systems the potential for and consequences of general equilibrium effects should be studied as well second it is important to address shortcomings in these models of economic decision making valuable improvements could be gained from developing coupled models that draw insights from behavioral economics many decision makers deviate systematically from actions that would be predicted by strict rationality but very few iams incorporate this behavior potentially leading to inaccurate predictions about the effects of policies and regulations improved models of human adaptation and induced technological change can also be incorporated into coupled models particularly for medium to long run models decisions about adaptation and technological change will have substantial effects on the conclusions and policy implications but more compelling methods for incorporating these changes into modeling are sorely needed in addition some economic decisions are intrinsically dynamic yet few coupled models explicitly incorporate dynamic models economic models that address uncertainty in decision making are also underutilized in coupled models of the few system 2 coupling models across disciplines despite much recent progress established models for one component of the few system often cannot currently produce outcomes that can be used as inputs for models of other components this misalignment makes integrated modeling difficult and is especially apparent in linking models of natural phenomena with models of economic decision making economic agents typically act to maximize a form of utility or welfare that is not directly linked to physical processes and they typically require probabilistic forecasts as an input to their decision making that many models in the natural sciences cannot directly produce we believe that an especially promising approach is the development of bridge models that convert outputs from one model into inputs for another such models can be viewed as application specific reduced form distillations of a richer and more realistic underlying model ideally these bridge models would be developed in collaborative research projects involving economists statisticians and disciplinary specialists and would contribute to improved understanding in the scientific discipline as well 3 model validation and comparison there is little clarity on how models should be evaluated and compared to each other both within individual disciplines and as components of larger iams this challenge makes larger integrated modeling exercises extremely difficult some potential ways to advance are by developing statistical criteria that measure model performance along the dimensions suitable for inclusion in an iam as well as infrastructure and procedures to facilitate model comparisons focusing on the models out of sample distributional forecasting performance as well as that of the iam overall is especially promising and of particular importance moreover applications of iams tend to estimate the effect of hypothetical future policy actions but there have been very few studies that have used these models to estimate the effect of past policy actions these exercises should be encouraged they offer a well understood test bed for the iams and also contribute to fundamental scientific knowledge through better understanding of the episode in question the retrospective nature of this form of analysis also presents the opportunity to combine reduced form estimation strategies with the iams as an additional method of validation

dynamic poverty decomposition analysis an application to the philippines summary in this paper we propose a new method of poverty decomposition our method remedies the shortcomings of existing methods and has some desirable properties such as time reversion consistency and subperiod additivity our decomposition integrates the existing methods of growth redistribution decomposition and sector based decomposition because it allows us to decompose the change in poverty into growth and redistribution components for each group e g regions or sectors in the economy our decomposition works well in cases where only partial data are available for some periods it is also flexible and can be extended to have the following six components population shift within region redistribution between region redistribution nominal growth inflation and methodological change components the empirical application of the six way decomposition to the philippines for the period 1985 2009 shows that important policies for poverty reduction may differ across regions for example the autonomous region in muslim mindanao would need growth enhancing policies whereas eastern visayas would need policies to improve the income distribution our decomposition method has a wide applicability and may complement the poverty profile approach

designing economic instruments for the environment in a decentralized fiscal system when external effects are important markets will be inefficient and economists have considered several broad classes of economic instruments to correct these inefficiencies however the standard economic analysis has tended to neglect important distinctions and interactions between the geographic scope of pollutants the enforcement authority of various levels of government and the fiscal responsibilities of the levels of government for example externalities generated in a particular local area may be confined to the local area or may spill over to other jurisdictions also local governments may be well informed about how best to regulate or enforce pollution control within their jurisdiction but they may not consider the effects of their actions on other jurisdictions finally the existence of locally generated waste emissions affects the appropriate assignment of both expenditure and tax responsibilities among levels of government the standard analysis therefore focuses mainly upon an aggregate or national perspective it typically ignores the possibility that the externality may be created and addressed by local governments and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems this paper examines the implications of decentralization for the design of corrective policies that is how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services as well as to choose tax instruments that can both finance these expenditures and correct the market failures of externalities

the spatial extent of water quality benefits in urban housing markets water quality regulation continues to be controversial as demonstrated by recent litigation between the u s environmental protection agency and the state of florida over nutrient standards while the costs of standards are usually known benefits may be diverse and difficult to identify this study investigates the effects of enhanced water quality on both waterfront and nonwaterfront property prices using hedonic models within an urban market findings indicate 1 the value of increased water quality depends upon the property s location and proximity to waterfront and the surface area of the water body and 2 aggregate benefits to nonwaterfront homes may dominate those realized by waterfront homeowners

why have some indian states done better than others at reducing rural poverty the unevenness of the rise in rural living standards in the various states of india since the 1950s allowed the authors to study the causes of poverty they modeled the evolution of average consumption and various poverty measures using pooled state level data for 1957 91 they found that poverty was reduced by higher agricultural yields above trend growth in nonfarm output and lower inflation rates but these factors only partly explain relative success and failure in reducing poverty initial conditions also mattered states that started the period with better infrastructure and human resources with more intense irrigation greater literacy and lower infant mortality rates had significantly greater long term rates of consumption growth and poverty reduction by and large the same variables that promoted growth in average consumption also helped reduce poverty the effects on poverty measures were partly redistributive in nature after controlling for inflation the authors found that some of the factors that helped reduce absolute poverty also improved distribution and none of the factors that reduced absolute poverty had adverse impacts on distribution in other words there was no sign of tradeoffs between growth and pro poor distribution

agricultural incentives in developing countries measuring the effect of sectoral and economywide policies the impact of sector specific direct and economywide indirect policies on agricultural incentives for 18 developing countries for the period 1975 84 are estimated the direct effect is measured by the proportional difference between the producer price and the border price adjusting for distribution storage transport and other marketing costs the indirect effect has two components 1 the impact of the unsustainable portion of the current account deficit and of industrial protection policies on the real exchange rate and thus on the price of agricultural commodities relative to nonagricultural nontradables and 2 the impact of industrial protection policies on the relative price of agricultural commodities to that of nonagricultural tradable goods the authors found that a in almost all cases the direct effect is equivalent to a tax on exportable goods and to a subsidy for importables b the indirect effect also taxes agriculture and dominates the direct effect and c the direct policies for both importables and exportables stabilize domestic producer prices

endogenous timing in the presence of non monotonicities the aim of this paper is to generalize the endogenous timing game proposed by hamilton and slutsky games and economic behavior 1990 2 pp 29 46 by allowing the payoff or the marginal payoff of a player to become non monotonic with respect to the strategy of the opponent we propose a taxonomy of the subgame perfect nash equilibria based on the characteristics of the payoff functions proposed by eaton canadian journal of economics 2004 37 pp 805 29 we determine under which conditions of the initial payoff functions commitment has a social value and when the simultaneous move nash equilibrium is commitment robust and discuss its pareto efficiency

efficient waste management policies and strategic behavior with open borders during the last decade waste management has been characterized by two main trends the growth of international trade of waste materials and the introduction of extended producer responsibility epr as a policy instrument in this paper a two country stylized model with imperfect competition in the recycling market is used to address two research questions first how do epr recycling targets interact with other policy instruments such as taxes on recycling residues and excise duties second how does strategic behavior of national policy makers influences the use of policy instruments the model demonstrates that a combination of epr with other instruments is needed to achieve the first best outcome when governments do not coordinate policies across borders strategic behavior may lead to a race to the bottom for taxes on recycling residues conversely strategic behavior may lead to a counter intuitive race to the top for excise duties and epr recycling targets it is shown that these instruments are not only used to stimulate waste prevention but also to extract rents from foreign recyclers

income and co2 emissions evidence from panel unit root and cointegration tests abstract this paper re investigates the stationarity properties of per capita carbon dioxide co 2 emissions and real gross domestic product gdp per capita for 109 countries within seven regional panel sets covering 1971 2003 we apply the recent unit root test of the panel seemingly unrelated regressions augmented dickey fuller suradf test developed by breuer et al 2001 misleading inferences from panel unit root tests with an illustration from purchasing power parity review of international economics 9 482 493 2002 series specific unit root tests with panel data oxford bulletin of economics and statistics 64 527 546 the panel suradf test accounts for the presence of cross country correlations in the data and the parameters in the panel specification vary across countries more importantly this test allows us to identify how many and which members of the panel contain a unit root overall our empirical results illustrate that real gdp and co 2 emissions in these countries are a mixture of i 0 and i 1 processes and that the traditional panel unit root tests could lead to misleading inferences as well as the conduct of cointegration analysis being perhaps inappropriate the results of our analysis carry critical implications for the modeling of co 2 emissions and gdp because of the different orders of integration for the two variables

polluting thy neighbor unintended consequences of china s pollution reduction mandates this paper studies how the pollution reduction mandates imposed by china s central government in 2001 triggered unanticipated responses from its provinces we apply the difference in differences in differences ddd method to a unique dataset on industry level activities in counties along 24 major rivers in china from 1998 through 2008 we find that the most downstream county of a province has up to 20 percent more water polluting activities than otherwise identical counties since 2001 moreover we find that the enforcement of pollution fee collection is more lenient in the most downstream county of a province and that private firms contribute more to the downstream effect than state owned enterprises and foreign firms these findings are consistent with the hypothesis that the provincial governments respond to the pollution reduction mandates by shifting their enforcement efforts away from the most downstream county

heterogeneity stratification and growth macroeconomic implications of community structure and school finance this paper examines how socioeconomic stratification and alternative systems of education finance affect inequality and growth agents interact through local public goods or externalities school funding neighborhood effects and economywide linkages complementary skills knowledge spillovers sorting families into homogeneous communities often minimizes the costs of existing heterogeneity but mixing reduces heterogeneity faster integration therefore tends to slow down growth in the short run yet raise it in the long run a move to state funding of education presents society with a similar intertemporal trade off local and global complementarities play major roles in determining the efficient social and educational structures copyright 1996 by american economic association

income distribution in rice growing villages during the post green revolution periods the philippine case 1985 and 1998 this paper aims to examine changes in household income sources and its impact on household income distribution in the post green revolution periods in 1985 and 1998 in the rural philippines we found that there has been a structural shift of household income away from farm in favor of nonfarm labor income sources this finding indicates that rural development is being led by nonfarm sectors such a shift has resulted in an increase in household income inequality as the distribution of nonfarm income has become less equal over time and was markedly more unequal than that of farm income in 1998

reputation with noisy precommitment abstract a long run player with private information about how long the game will last must precommit to an action and faces a sequence of short run players who get a noisy signal of that action since noise vanishes with time we might expect a long lived long run player to behave as a stackelberg leader if so short run players may end up ignoring the signal then however the long run player would have no reason to actually choose the stackelberg action we show that this paradox can be resolved if there is a chance that the long run player chooses other action by mistake and the signal is sufficiently informative journal of economic literatureclassification numbers c72 c73

a new era of pollution progress in urban china abstract over the last 30 years china s economy has boomed this trend has lifted hundreds of millions of chinese out of poverty but it has also sharply increased local regional and global pollu

stackelberg leadership as a natural solution under cost uncertainty this paper analyzes a differentiated duopoly model with cost uncertainty in an environment where information sharing is prohibited the duopolists can commit themselves to be a stackelberg leader or follower at the time when they know the distribution but not the actual values of their own and the rival s costs in a natural stackelberg situation the firms agree on the assignment of roles and neither prefers the bayesian nash equilibrium an natural stackelberg situation is shown to be possible under quantity but not price competition total expected welfare is higher in the natural stackelberg situation than in the nash equilibrium copyright 1990 by blackwell publishing ltd