the internal market and hospital efficiency a stochastic distance function approach the uk internal market was one of the first european attempts to introduce a competitive mechanism in the provision of hospital services the assumption was that competition would have led hospitals to increase efficiency in the use of their resources the aim of this paper is to analyse the effectiveness of this kind of reform by measuring the changes in technical efficiency of a panel of 52 acute scottish hospitals observed from 1991 92 to 1996 97 the time period covers the whole duration of the internal market and the sample contains a different mix of both trusts and non trusts where the former embed the proper working of the reform the selected model is a stochastic output distance function that includes an interaction dummy variable to allow for parameters to change over time the results show a structural break after which hospitals change not only the way in which they provide their services but also the kind of services they provide favouring the quicker treatment of patients on a day basis

political competition and voter mobility the existing model of political competition is extended to allow voters to live in different regions and to migrate between regions in response to an inter regional transfer policy we then show that regions have a different weight in the expected vote function of political parties this gives parties an incentive to bias the transfer policy in favour of relatively high weight regions with potentially adverse efficiency and equity effects however we then show that parties always propose efficient and equitable regional transfers regardless of whether regions have different weights if there is some mobility of citizens across regions mobility constrains parties to act efficiently and equitably even though they face an incentive to act otherwise however when voters are immobile political competition leads to inequitable though efficient outcomes

expectations about voter choices a comment the only essential differences in the examples analyzed above are in the assumptions that are used to derive or directly specify the choice behavior that the candidates expect from any given voter conditional on his utility function when the central behavioral assumption from the traditional models was used the equilibrium was a median outcome a conclusion directly analogous to what happens in the corresponding unidimensional traditional voting models when the central behavioral assumptions from the probabilistic voting model developed in coughlin and nitzan 1981 were used the equilibrium was at the maximum of the expected log utility function a conclusion directly analogous to what happens in the model in coughlin and nitzan 1981 indeed it was only when the corresponding assumptions from ledyard 1984 were used i e the particular assumptions that ledyard used to derive the choice behavior that the candidates expect from any given voter conditional on his utility function that the conclusions were substantially different from the conclusions derived from earlier models this reflects the important role these assumptions play in making ledyard s conclusions about candidate strategies substantially different from earlier results in the literature on spatial models of elections

the choice between market failures and corruption because government intervention transfers resources from one party to another it creates room for corruption as corruption often undermines the purpose of the intervention governments will try to prevent it they may create rents for bureaucrats induce a misallocation of resources and increase the size of the bureaucracy since preventing all corruption is excessively costly second best intervention may involve a certain fraction of bureaucrats accepting bribes when corruption is harder to prevent there may be both more bureaucrats and higher public sector wages also the optimal degree of government intervention may be nonmonotonic in the level of income

contracts as a barrier to entry it is shown that an incumbent seller who faces a threat of entry into his or her market will sign long term contracts that prevent the entry of some lower cost producers even though they do not preclude entry completely moreover when a seller possesses superior information about the likelihood of entry it is shown that the length of the contract may act as a signal of the true probability of entry

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

tests of a rational theory of the size of government in many countries the political party holding power changes more frequently than the trend growth rates in government spending and taxes shifts of political power are often preceded by rhetoric about meeting needs or cutting taxes which post election performances rarely match yet changes in the size of government up and down occur on average the size of government measured by the share of taxes or spending to output has increased in many countries during the past century but changes in size occur at diffrent rates and at times the relative size of government declines

productivity in public services abstract this paper discusses issues arising in the measurement of productivity in public services compared to measuring productivity in the private sector difficulties arise because the output of public services is often unpriced and because some public services are consumed collectively a key problem is measuring the full range of outputs and quality improvements delivered by public sector organizations that are valued by society without comprehensive measures of output productivity statistics may be misleading i outline methods used in the measurement of both private and public sector productivity and discuss the measurement of public sector productivity in practice finally i discuss studies that examine factors underlying productivity differences and productivity growth in public and private sector organizations public sector reforms and the use of pilot schemes in public sector organizations present opportunities for research to identify causal effects on productivity

the effects of regulation and competition in the nhs internal market the case of general practice fundholder prices the 1989 reforms of the uk national health service introduced competition in supply within a tightly regulated framework the paper examines whether this competition affects the prices posted by sellers of medical services we argue that despite regulation market forces may have an impact on price we test this using the posted prices for one of the two types of buyer general practice fundholders we find the regulatory rules are not observed and some evidence of the impact of market forces on price

market structure and prices the responses of hospitals in the uk national health service to competition abstract the internal market reforms to the uk national health service nhs are a model adopted in many health care systems they introduce competition in supply little is known about the impact of these reforms this paper examines the pricing responses of nhs suppliers to competition the incentives of the reformed system are analysed these indicate that prices should differ between buyers and markets these hypotheses are tested using data on spot market transactions between hospitals and health care buyers the results indicate considerable price variability but offer broad support for the hypotheses

a theory of collective reputations with applications to the persistence of corruption and to firm quality the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by his past behaviour and because his track record is observed only with noise by the group s past behaviour as well the paper thus studies the joint dynamics of individual and collective reputations and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality 1 collective reputations collective reputations play an important role in economics and the social sciences countries ethnic racial or religious groups are known to be hard working honest corrupt hospitable or belligerent some firms enjoy substantial rents from their reputations for producing high quality products some departments are reported to treat their faculty or students fairly the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by her past behaviour and because her track record is observed only with noise by the group s past behaviour as well the paper studies the joint dynamics of individual and collective reputations in a model in which current generations are progressively replaced by new ones and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature see section 2 for a detailed comparison with the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality let us spell out the building blocks of our theory in more detail a a group s reputation is only as good as that of its members each member is characterized by individual traits such as talent diligence or honesty past individual behaviour conveys information about these traits and generates individual reputations

exclusionary vertical contracts and product market competition this article considers whether a monopolist is able to deter more efficient entrants through contracting with buyers in the antitrust literature the chicago school s stand is that such contracts cannot be anticompetitive hence vertical contracts should be accorded per se legal status in a four stage game with the following features 1 the incumbent enjoys a first mover advantage 2 the entrant must incur some sunk cost to enter the market and 3 entry is uncertain the author shows that vertical contracts can be anticompetitive if there exists product market competition thus the author advocates caution in treating all contracts as per se legal a three factor repeated measures experiment tested the effect of leadership style charismatic structuring and considerate on performance improvement on a manufacturing task over four trials findings from a repeated measures multivariate analysis of variance indicated that individual exposed to considerate leadership had superior initial performance but that this difference faded over time further analysis indicated that self efficacy fully mediated the relationship between leadership style and performance copyright 1999 by university of chicago press

does competition from private surgical centres improve public hospitals performance evidence from the english national health service abstract this paper examines the impact of a government programme which facilitated the entry of for profit surgical centres to compete against incumbent national health service hospitals in england we examine the impact of competition from these surgical centres on the efficiency measured by pre surgery length of stay for hip and knee replacement patients and case mix of incumbent public hospitals we exploit the fact that the government chose the broad locations where these surgical centres independent sector treatment centres or istcs would be built based on local patient waiting times not length of stay or clinical quality to construct treatment and control groups that are comparable with respect to key outcome variables of interest using a difference in difference estimation strategy we find that the government facilitated entry of surgical centres led to shorter pre surgery length of stay at nearby public hospitals however these new entrants took on healthier patients and left incumbent hospitals treating patients who were sicker this paper highlights a potential trade off that policymakers face when they promote competition from private for profit firms in markets for the provision of public services

corruption in russia abstractwe analyze the determinants of corruption in russia using law enforcement data on corruption incidents for a panel of 79 russian regions for the period 2004 13 we find that the relative salaries of bureaucrats determine corruption levels corruption declines as relative salaries rise yet at strongly diminishing rates furthermore we show that even very limited media freedom helps to curtail corruption other important determinants are the strength of law enforcement education levels and unemployment rates

credibility and policy convergence in a two party system with rational voters the traditional approach to modeling political parties behavior based upon the contribution of anthony downs 1957 assumes that the parties unique objective is to win elections thus they maximize their popularity the crucial implication of this assumption for a two party system is that if the two parties have the same information about voters preferences full convergence of policies results from electoral competition this is the crucial implication of the median voter theorem more generally it may be argued that different parties are motivated differently because they represent different constituencies parties may not care only about winning elections per se but also about the quality of the policies resulting from an election in this case the candidates of the two parties view winning an election not only as a goal per se but also as a means of implementing a better policy for their respective constituencies this paper shows that electoral competitions imply dynamic inconsistency if the voters are modeled as rational and forwardlooking agents and parties do not care exclusively about being elected but also about which policy to implement once elected the dynamic inconsistency arises as follows the parties have an incentive to announce convergent platforms to increase their chances of election however if the elected party is not committed to its electoral platform it has an incentive to follow its most preferred policy rather than the policy announced in its platform if voters are rational they account for this incentive thus in general in a one shot electoral game the only timeconsistent equilibrium is one in which no convergence is possible the two parties follow their most preferred policies and the voters rationally expect this outcome full convergence of parties platforms results only as a limiting case when the parties are completely indifferent with respect to the quality of the policies resulting from the election thus these results differ from the existing literature on ideologically motivated politicians for instance donald wittman 1977 1983 randall calvert 1985 which implicitly assumes the possibility of binding commitments to electoral platforms complete or partial policy convergence can be the outcome of political competition if the interaction between the parties and the voters is modeled as an infinitely repeated game in fact if the candidates have concave objective functions the welfare maximizing policy rule implies a complete convergence of parties policies however this cooperative and agreed upon policy may or may not be sustainable as a subgame perfect equilibrium depending on parameter values in particular it depends on the discount rates of the two parties the degree of polarization of their preferences and the relative popu graduate school of industrial administration carnegie mellon university pittsburgh pa 15213 and national bureau of economic research cambridge ma 02138 this paper is based upon a chapter of my unpublished doctoral dissertation at harvard university i am greatly indebted to jeffrey sachs for directing my attention toward these issues and for many conversations i also wish to thank andrew abel dilip abreu olivier blanchard ramon caminal andrew caplin alex cukierman morris fiorina benjamin friedman herschel grossman howard rosenthal and the referees for very useful comments the responsibilitv af anv n mtnkieis af calrirp nfnlv mine the result of policy convergence in a two party system is more general than the median voter theorem for discussions of convergence results not at the median see john ledyard 1984 peter coughlin 1984 coughlin and shmuel nitzan 1981 melvin hinich 1977 for earlier work on spatial competition see richard mckelvey 1975 hinich ledyard and peter ordeshook 1972 1973 and the references quoted therein the present paper focuses on the result of convergence rather than on the median voter theorem per se

the impact of hospital market structure on patient volume average length of stay and the cost of care a variety of recent proposals rely heavily on market forces as a means of controlling hospital cost inflation sceptics argue however that increased competition might lead to cost increasing acquisitions of specialized clinical services and other forms of non price competition as means of attracting physicians and patients using data from hospitals in 1972 we analyzed the impact of market structure on average hospital costs measured in terms of both cost per patient and cost per patient day under the retrospective reimbursement system in place at the time hospitals in more competitive environments exhibited significantly higher costs of production than did those in less competitive environments

exclusive quality exclusive quality in the case of vertically differentiated products bertrand competition at the retail level does not prevent an incumbent upstream firm from using exclusivity contracts to deter the entry of a high quality rival indeed because of differentiation the incumbent s inferior product is not eliminated upon entry due to the resulting competitive pressure a retailer who considers rejecting the exclusivity contract expects to earn much less than the incumbent s monopoly rents thus in equilibrium the incumbent can always offer high enough an upfront payment to induce all retailers to sign the contract and achieve exclusion this is true under linear pricing for intermediate levels of entry costs and with two part tariffs even in the absence of entry costs copyright 2010 the author the journal of industrial economics 2010 blackwell publishing ltd and the editorial board of the journal of industrial economics

political competition and pork barrel politics in the allocation of public investment in mexico this paper examines the effect of political competition in local elections in re gional allocation of public investment the study employs data on mexican elections covering the period 1990 95 characterised by an increase in electoral competition and coupled with increasing demands for decentralisation throughout the states empirical evidence supports the hypothesis that regional allocation of public investment by central government was driven by political opportunism and local pork barrel politics a positive relationship was found between the regional allocation of public investment and support for the central ruling party this might indicate that local spending inefficiencies were partially explained by the specific support for the incumbent party

paying politicians theory and evidence this paper looks at the theory behind the idea that paying politicians better will improve their performance the paper lays out a political agency model with adverse selection and moral hazard where politicians are subject to two period term limits this model provides a number of predictions about how the pay of politicians affects agency problems we also consider what happens when the pool of politicians is endogenous the main ideas in the model are confronted with data on u s governors jel d72 j33

majority rule and election models abstract this paper surveys the theoretical work that has been done on majority rule and economic models of elections section i provides an overview of the topic section 2 reviews the most important results that have been obtained about majority rule as an abstract collective choice rule section 3 identifies some alternative inferences that can be made from those results section 4 covers some models that include additional features that are present in political institutions where majority rule is used section 5 concentrates on some alternative election models and equilibrium concepts section 6 focuses on election models with abstentions and or candidate uncertainty about voter behaviour section 7 compares and contrasts models where candidates are certain about what the voters choices will be contingent upon about the choices made by the candidates and models where they are uncertain about those choices section 8 closes the survey by identifying some emerging areas of research

price and concentration in hospital markets the switch from patient driven to payer driven competition perhaps the most widely accepted paradigm of industrial organization i o is that competition lowers prices or alternatively that price cost margins are lower in less concentrated markets 1 the applicability of this paradigm for hospital markets has been questioned for example in united states vs carilion health system and roanoke valley hospital the district and appellate courts accepted evidence that hospital prices are lower in more concentrated markets and thereby approved a merger between the two largest hospitals in a three hospital market 2 the view that competition has a weak or perverse effect on hospital prices is shared by a number of researchers 3 is a common theme in newspaper stories

the industrial organization of health care markets the u s health care sector is large and growing health care spending in 2011 amounted to 2 7 trillion and 18 percent of gdp approximately half of health care output is allocated via markets in this paper we analyze the industrial organization literature on health care markets focusing on the impact of competition on price quality and treatment decisions for health care providers and health insurers we conclude with a discussion of research opportunities for industrial organization economists including opportunities created by the u s patient protection and affordable care act

excessive public employment and rent seeking traps we propose a model where the size of the public sector and aggregate output are interrelated through the occupational choice of agents who differ in their skill level and degree of public mindedness when the public sector attracts bureaucrats with low degree of public service motivation they will use their position to rent seek by employing an excessive number of unskilled workers this leads to an equilibrium with relatively high unskilled wages which lowers profits and deters entrepreneurship conversely an equilibrium with a lean public sector and greater private economic activity arises when public service motivated agents populate the state bureaucracy these agents exert high effort and employ a limited number of unskilled workers our model also shows that a bloated public sector with high wages may be supported by the unskilled agents

the changing role of government in financing health care an international perspective this paper explores the changing role of government involvement in health care financing policy outside the united states it provides a review of the economics literature in this area to elucidate the implications of recent policy changes on efficiency costs and quality our review reveals that there has been some convergence in policies adopted across countries to improve financing incentives and encourage efficient use of health services in the case of risk pooling all countries with competing pools experience similar difficulties with selection and are adopting more sophisticated forms of risk adjustment in the case of hospital competition the key drivers of success appear to be what is competed on and measurable rather than whether the system is public or private in the case of both the success of performance related pay for providers and issues resulting from wait times evidence differs within and across jurisdictions however the evidence does suggest that some governments have effectively reduced wait times when they have chosen explicitly to focus on achieving this goal many countries are exploring new ways of generating revenues for health care to enable them to cope with significant cost growth but there is little evidence to suggest that collection mechanisms alone are effective in managing the cost or quality of care jel h51 i11 i18

the changing effects of competition on non profit and for profit hospital pricing behavior abstract has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors this paper uses time series cross sectional methods on california hospital discharge data from 1986 1994 to show the association of hospital prices with measures of market concentration changed steadily over this period with prices now higher in less competitive areas even for non profit hospitals regression results are used to simulate the price impact of hypothetical hospital mergers

does competition between hospitals improve the quality of care hospital death rates and the nhs internal market payer driven competition has been widely advocated as a means of increasing efficiency in health care markets the 1990s reforms to the uk health service followed this path we examine whether competition led to better outcomes for patients as measured by death rates after treatment following heart attacks using data that until 1999 was not publicly available in any form on hospital level death rates we find that the relationship between competition and quality of care appears to be negative greater competition is associated with higher death rates controlling for patient mix and other observed characteristics of the hospital and the catchment area for its patients however the estimated impact of competition is small jel classification i1 l8 h4

a dynamic model of quality competition with endogenous prices abstract we develop a dynamic model of price and quality competition in order to analyze the effects of competition on quality provision and to which extent an unregulated market is able to provide a socially optimal quality level our model combines a differential game approach with a hotelling spatial competition framework and our analysis applies in particular to industries such as long term care health care child care and education if providers nursing homes hospitals schools nurseries use closed loop decision rules which imply strategic interaction over time we show that although increased competition leads to higher quality in the steady state quality provision is nevertheless lower than under open loop rules and also suboptimally low from a welfare perspective thus our analysis identifies dynamic strategic interaction between competing providers as a potential source of inefficiency in quality provision

hospital competition and quality with regulated prices we analyse the effect of competition on quality in hospital markets with regulated prices considering the effect of both introducing competition monopoly versus competition and increasing competition through either lower transportation costs increased substitutability or a higher number of hospitals with semi altruistic providers and a fairly general cost structure we show that the relationship between competition and quality is generally ambiguous in contrast to the received body of theoretical literature this is consistent with and potentially explains the mixed empirical evidence

competition among hospitals the traditional view of hospital competition has posited that hospitals compete primarily along quality dimensions in the form of fancy equipment to attract admitting physicians and pleasant surroundings to entice patients price competition among hospitals is thought to be non existent this paper estimates the effects of various hospital market characteristics on hospital prices and expenses in an attempt to determine the form of hospital competition the results suggest that both price and quality competition are greater in markets that are less concentrated although the net effect of the two on prices is insignificant it appears therefore that despite important distortions hospital markets are not immune to standard competitive forces

corruption as an occupational choice endogenous corruption and tax policy corruption is endemic in many countries and empirical studies have demonstrated how it impacts on macroeconomic indicators theoretical studies have generally assumed an exogenously given proportion of the population are corrupt or that the public sector is fixed in size far fewer explore how corruption emerges endogenously we endogenize corruption as an occupational choice workers choose private or public employment public employees can be honest or corrupt corruption is subject to a social sanction that results in a loss of self esteem those who care little about the social sanction choose to be corrupt when a firm meets a corrupt public employee it pays a bribe to secure a reduction in the tax rate the economy has two self sustaining equilibria with different levels of corruption corruption reduces tax revenue and the tax rate that maximizes revenue an increase in the social sanction reduces corruption but also reduces tax revenues if the economy is in a high corruption equilibrium paying a wage premium to public sector workers can result in all public sector workers being corrupt public sector audits to detect corrupt workers always reduce corruption but can only increase welfare when they are cheap to conduct and the economy is in a low corruption equilibrium

does hospital competition save lives evidence from the english nhs patient choice reforms recent substantive reforms to the english national health service expanded patient choice and encouraged hospitals to compete within a market with fixed prices this study investigates whether these reforms led to improvements in hospital quality we use a difference in difference style estimator to test whether hospital quality measured using mortality from acute myocardial infarction improved more quickly in more competitive markets after these reforms came into force in 2006 we find that after the reforms were implemented mortality fell i e quality improved for patients living in more competitive markets our results suggest that hospital competition can lead to improvements in hospital quality

is hospital competition socially wasteful we study the consequences of hospital competition for medicare beneficiaries heart attack care from 1985 to 1994 we examine how relatively exogenous determinants of hospital choice such as travel distances influence the competitiveness of hospital markets and how hospital competition interacts with the influence of managed care organizations to affect the key determinants of social welfare expenditures on treatment and patient health outcomes in the 1980s the welfare effects of competition were ambiguous but in the 1990s competition unambiguously improves social welfare increasing hmo enrollment over the sample period partially explains the dramatic change in the impact of hospital competition

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persistent court corruption levels of court corruption differ widely across the world to give just one example in a recent survey of firms in transition economies the proportion of respondents who answered that firms in their line of business never have to make additional payments to deal with the courts ranged from 86 8 in hungary to just 37 2 in albania a second notable feature of court corruption is its persistence over time in spite of almost universal condemnation of the phenomenon and frequent government anti corruption campaigns this article presents a simple model that explains both the variation and persistence of corruption the main argument is as follows a major role of the legal system is to provide incentives to individuals to take or abstain from certain actions this is true of regulation criminal law contract law and tort law alike however when courts are corrupt the incentive effect provided by court enforced fines and other penalties is reduced to maintain incentives higher penalties are required but these higher penalties in turn raise the bribes that court officials can extract since the stakes to winning a court case are now higher finally higher bribes make court employment more attractive to dishonest individuals which raises the corruptibility of the court loosely speaking then corruption and penalties are complements corruption necessitates higher penalties while higher penalties engender corruption the feedback effect just described gives rise to the possibility of multiple equilibria that is apparently similar countries can have very different levels of court corruption one country may have a relatively honest pool of court officials and a low level of penalties while a second country may have the opposite moreover if a country in a high corruption equilibrium attempts to shift to using smaller penalties the immediate effect is a fall in the incentives provided by the legal system as such a country can find itself stuck in a high corruption equilibrium

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

the effects of market structure and bargaining position on hospital prices ppos and hmos have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers we investigated prices obtained in different types of markets by the largest ppo in california our findings indicate that greater hospital competition leads to lower prices furthermore as the importance of a hospital to the ppo in an area increases the price rises substantially our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price increasing effects of a merger

legal efficiency and consistency abstract we analyze the efficiency and consistency of court decisions under common and civil law as a leading example we study the enforcement of property rights judges are of two types some are conservative and follow the precedent or the statute while others maximize social welfare when courts intervene ex post after the relevant economic choices have been made welfare maximizing courts face a commitment problem such an ex post bias has implications on the relative consistency and efficiency of each legal system surprisingly we find that court decisions are more consistent under common law than under civil law the welfare comparison between the two systems is instead ambiguous however in changing economic environments common law is more likely to dominate civil law because of its greater adaptability

welfare policies and migration of the poor in the united states an empirical note this paper has investigated the impact of geographic welfare benefit differentials upon migration in the united states unlike other related studies which typically focus upon black migration as a surrogate measure of migration of the poor the present study focuses directly upon migration of the poor per se a variety of reduced form estimates are provided the evidence strongly suggests that the net in migration of the poor is positively and significantly influenced by higher nominal afdc levels and by higher real afdc levels these findings support the welfare magnet hypothesis which alleges that relatively high welfare levels act to attract poor migrants moreover given that poor migrants are attracted non only by high nominal welfare levels but also by high real welfare levels an argument can be made for establishing geographically uniform real welfare benefit levels in the united states this uniformity presumably should act over the long run to eliminate the human resource distortions being caused by the currently prevailing welfare system

taxes and bribery the role of wage incentives this paper presents a simple model to evaluate alternative payment schemes for tax inspectors in the presence of corruption we consider problems of both moral hazard which arises because taking bribes cannot be observed without costly monitoring and adverse selection since not all potential tax inspectors can be identified as being honest or dishonest we identify three wage regimes first one could pay the same wage that a tax inspector could earn elsewhere his reservation wage second one could pay a wage which solves the moral hazard problem i e deters bribery this we call an efficiency wage by analogy with recent models examined i n macro economics third the government could pay a wage below the reservation wage at which only the dishonest become tax inspectors the capitulation wage we make precise the conditions under which each yields the greatest amount o f tax revenues net o f administrative costs many countries in the developing world are undergoing structural adjustment programmes which require fundamental fiscal changes outside agencies advise restoration of budget balance a task which involves expenditure cuts and tax increases the treatment of public employee pay scales often poses a particular dilemma i n this process wages and salaries are a significant component of government expenditures and one important question concerns the extent to which wages rather than employment cuts should be used to save money there is sometimes a reluctance to advocate wage cuts stemming in part from a feeling that this might impair the performance of the public sector hence tanzi 1990 argues that a policy of wage cutting is likely to increase the inefficiency of public sector employees especially at a time when the public sector is expected to play a larger role in restructuring the economy p 16 in the context of tax collection the issue is particularly pressing given the need to raise more tax revenues a reduction in efficiency in this branch of the government i s likely t o mean that fewer returns are processed and when individuals living standards are squeezed their incentive to accept bribes in lieu o f collecting taxes i s increased o n this count i t i s even sometimes suggested that wages of tax inspectors should be increased to aid the effort to the comments of henry bienen john hey and two anonymous referees have been helpful in revising this paper the authors are also grateful t o the john m olin program for the study o f economic organization and public policy at princeton university and the pew charitable trusts for financial support mclaren also acknowledges support from the international finance section of princeton university none of the above should be implicated in any way see for example goode 1984 chapter 1 3 and gould and amaro reyes 1983

the impact of regional competition on the health care industry we investigate factors that determine firm markups by employing data on prices and quantities of various medical procedures at major hospitals in the united states we focus on the impact of hospital quality rival competition and the number of medical procedures upon the health care demand our analysis covers health care markets across the united states with the market definition based upon the hospital referral regions our findings highlight potential implications of the relationship between hospital markups and market structure

an assessment of labour s record on health and healthcare this paper examines the record of the 1997 2010 labour administration on health and healthcare it begins by outlining the policies adopted by the administration with respect to the delivery of healthcare services and population health it then presents a two part assessment in the first part we examine the performance of the administration with respect to improvements in healthcare and population health in the second part we examine the healthcare policy record copyright 2013 oxford university press

buyer power and intrabrand coordination we analyze the competitive effects of vertical contracts in a contracting situation where rival retailers offer contracts to a manufacturer in contrast to bernheim and whinston 1998 who study the situation in which competing manufacturers offer contracts to a common retailer we find that two part tariffs even if contingent on exclusivity or not do not suffice to implement the monopolyoutcome richer arrangements including e g conditional fixed fees and upfront payments are thus required to internalize all contracting externalities the welfare implications are ambiguous on the one hand richer contracts ensure that no efficient retailer is excluded on the other hand they allow firms to maintain monopoly prices despite intrabrand competition simulations suggest that the latter effect may be more significant

the effect of competitive pressure on charity hospital responses to price shopping in california abstract since higher charges to private patients are a major source of financing for hospital care to the uninsured increased price shopping by private payers may mean that hospitals are less able to provide such care i study the effect of increased price shopping on california hospital markets over the 1984 1988 period i find that there was a large fall in net private revenues and net income in the least concentrated hospital markets in the state after the advent of price shopping perhaps as a result care to the uninsured fell dramatically in these markets as well relative to more concentrated markets