dodging the grabbing hand the determinants of unofficial activity in 69 countries across 69 countries higher tax rates are associated with less unofficial activity as a percent of gdp but corruption is associated with more unofficial activity entrepreneurs go underground not to avoid official taxes but to reduce the burden of bureaucracy and corruption dodging the grabbing hand in this way reduces tax revenues as a percent of both official and total gdp as a result corrupt governments become small governments and only relatively uncorrupt governments can sustain high tax rates 2000 elsevier science s a all rights reserved

corruption in america abstract we use a data set of federal corruption convictions in the u s to investigate the causes and consequences of corruption more educated states and to a smaller degree richer states have less corruption this relationship holds even when we use historical factors like congregationalism in 1890 as an instrument for the level of schooling today the level of corruption is also correlated with the level of income inequality and racial fractionalization and uncorrelated with the size of government there is a weak negative relationship between corruption and economic development in a state these results echo the cross country findings and support the view that the correlation between development and good political outcomes occurs because education improves political institutions

inequality and the environmental kuznets curve abstract is income inequality harmful to the environment the answer to this question has not reached a consensus in the literature this study seeks to provide insight into this question by examining the influence of income inequality on the environmental kuznets curve ekc i e the impact of income inequality on the ekc turning point two potential mechanisms through which inequality may affect the ekc turning point by reducing public demand for environmental protection and by increasing a power of capital owners to prevent such protection using a large sample n 170 174 of countries we find evidence of the ekc for so2 emissions and income inequality has a significant impact on the ekc turning point income inequality increases the ekc turning point suggesting that high inequality can be damaging to the environment the results are robust to potential outliers different data sources of income inequality a different so2 emissions measure changes in model specification different samples and an alternative estimation method we also find that inequality appears to be more important than corruption in determining the ekc turning point

determinants of technical efficiency in the bioenergy industry in the eu28 region most previous bioenergy industry research has concentrated on how to implement a certain level of yield however few articles have paid attention to rational resource allocation to increase efficiency to enhance bioenergy production through proper use of available resources this study identified the effects of internal country specific and external macroeconomic determinants of technical efficiency level in the bioenergy industry for the eu28 region the study was established based on a conceptual framework suggesting a correlation between input use and level of technical efficiency a panel data analysis method was employed for the analysis and a panel regression analysis framework based on the fixed effect fe model and random effect re model was used to examine the potential determinants of technical efficiency level in the bioenergy industry for the eu28 region for the period between 1990 and 2013 the results indicate that the technical efficiency level of the bioenergy industry in developing countries is higher than in developed countries the empirical findings also suggest that technical efficiency has greater influence on pure technical efficiency levels capital input labor input gross domestic product inflation and interest rate significantly affected the technical efficiency of the bioenergy industry in the developing and developed countries in the eu28 region during the period of this study the findings clearly call for regulators and decision makers to review the technical efficiency level of the bioenergy industry within the eu28 region this study also provides better information and guidance to the boards of the bioenergy industry as they need to have a clear understanding of the influence technical efficiency has on bioenergy production performance moreover the results of this study have implications for investors who focus mainly on profits from their investments

bureaucracy and growth a cross national analysis of the effects of weberian state structures on economic growth the role of bureaucratic authority structures in facilitating economic growth has been a sociological concern since max weber s classic contributions almost 100 years ago using a recent and original data set we examine the characteristics of core state economic agencies and the growth records of a sample of 35 developing countries for the 1970 1990 period our weberianness scale offers a simple measure of the degree to which these agencies employ meritocratic recruitment and offer predictable rewarding long term careers we find that these weberian characteristics significantly enhance prospects for economic growth even when we control for initial levels of gdp per capita and human capital our results imply that weberianness should be included as a factor in general models of economic growth they also suggest the need for more attention by policymakers to building better bureaucracies and more research by social scientists on variations in how state bureaucracies are organized

global land use implications of first and second generation biofuel targets recently an active debate has emerged around greenhouse gas emissions due to indirect land use change iluc of expanding agricultural areas dedicated to biofuel production in this paper we provide a detailed analysis of the iluc effect and further address the issues of deforestation irrigation water use and crop price increases due to expanding biofuel acreage we use globiom an economic partial equilibrium model of the global forest agriculture and biomass sectors with a bottom up representation of agricultural and forestry management practices the results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iluc factor meaning that overall emissions are 27 lower compared to the no biofuel scenario by 2030 the iluc factor of first generation biofuels global expansion is generally positive requiring some 25 years to be paid back by the ghg savings from the substitution of biofuels for conventional fuels second generation biofuels perform better also with respect to the other investigated criteria on the condition that they are not sourced from dedicated plantations directly competing for agricultural land if so then efficient first generation systems are preferable since no clear technology champion for all situations exists we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself

a comparative study of inequality and corruption this article argues that income inequality increases the level of corruption through material and normative mechanisms the wealthy have both greater motivation and more opportunity to engage in corruption whereas the poor are more vulnerable to extortion and less able to monitor and hold the rich and powerful accountable as inequality increases inequality also adversely affects social norms about corruption and people s beliefs about the legitimacy of rules and institutions thereby making it easier for them to tolerate corruption as acceptable behavior this comparative analysis of 129 countries using two stage least squares methods with a variety of instrumental variables supports the authors hypotheses using different measures of corruption the world bank s control of corruption index and the transparency international s corruption perceptions index the explanatory power of inequality is at least as important as conventionally accepted causes of corruption such as economic development the autho

can police deter drunk driving economic studies using aggregate data generally find that higher taxes are the most effective policy to reduce drunk driving while criminologists report strong evidence supporting law enforcement measures in policy evaluations this paper evaluates these differing perspectives using the aggregate data that is typically used in the economic literature ols and fixed effects models show that police can affect the probability of arrest for drunk driving and in combination with evidence from dui deterrence experiments this suggests that the failure of economic models to detect deterrence reflects the lack of systematic and sustained police efforts against dui

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

breaking the law when others do a model of law enforcement with neighborhood externalities abstract a standard assumption in the economics of law enforcement is that the probability of a violator being punished depends only on the resources devoted to enforcement however it is often true that the productivity of enforcement resources decreases with the number of violators in this paper an individual who violates the law provides a positive externality for other offenders because the probability of being punished decreases with the number of individuals violating the law this externality explains the existence of correlation between individuals decisions to break a law the model evaluates the implications when determining the socially optimal enforcement expenditure focusing specifically on the case of neighborhood crime in particular using a parametrized functional form i show that neighborhood externalities will enhance or impede enforcement depending on the crime rate

the intertemporal evolution of agriculture and labor over a rapid structural transformation lessons from vietnam abstract we combine nationally representative household and labor force survey data from 1992 to 2016 to provide a detailed description of rural labor market evolution and how it relates to the structural transformation of rural vietnam especially within the agricultural sector our study adds to the emerging literature on structural transformation in low income countries using micro level data and helps to answer several policy related questions we find limited employment creation potential of agriculture especially for youth rural urban real wage convergence has gone hand in hand with increased diversification of the rural economy into the non farm sector nationwide and rapid advances in educational attainment in all sectors and regions workforce minimum wage laws seem to have played no significant role in increasing agricultural wages this enhanced integration also manifests in steady attenuation of the longstanding inverse farm size yield relationship farming has remained securely household based and the family farmland distribution has remained largely unchanged small farm sizes have not obstructed mechanization nor the uptake of labor saving pesticides consistent with factor substitution induced by rising real wage rates as rural households rely more heavily on the labor market human capital accumulation rather than land endowments have become the key correlate of improvements in rural household well being

political economy of pension plans impact of institutions gender and culture abstract national pension systems are an important part of financial intermediation and worker welfare in most countries but how and why do they differ internationally controlling for important political economic and social institutions we document that international differences in pension progressivity or how pensions reflect lifetime earnings are negatively related to masculinity uncertainty avoidance individualism long term orientation employment rights average pension levels social trust and economic inequality we also find that pension progressivity is positively related to the economic and societal role of women the extent of catholicism as well as political voice and accountability these results provide important insights for both public policy and mnc managers

inequality and crime this paper considers the relationship between inequality and crime using data from urban counties the behavior of property and violent crime are quite different inequality has no effect on property crime but a strong and robust impact on violent crime with an elasticity above 0 5 by contrast poverty and police activity have significant effects on property crime but little on violent crime property crime is well explained by the economic theory of crime while violent crime is better explained by strain and social disorganization theories

income inequality corruption and subjective well being based on the data of cgss2013 we analyse the relationship between income inequality corruption and subjective well being using an ordered probit model our results indicate that income inequality

wealth culture and corruption this paper examines the impact of national wealth income distribution government size and four cultural variables on the perceived level of corruption in a country the study finds that corruption is significantly correlated to gnp per capita power distance masculinity and uncertainty avoidance significant interaction effects occur in collectivistic and high power distance countries suggestions for future research are developed

explaining international and intertemporal variations in income inequality this paper explores the propositions that income inequality is relatively stable within countries and that it varies significantly among countries a new and expanded data set provides broad support for both propositions drawing on a political economy and capital market imperfection arguments to explain the intertemporal and international variation in inequality the empirical analysis shows that the predicted variables associated with the first argument a measure of civil liberties and the initial level of secondary schooling and the second argument a measure of financial depth and the initial distribution of land are indeed important determinants of inequality this paper explores two propositions regarding income inequality they are first income inequality is relatively stable within countries and second it varies significantly across countries to illustrate note that the gini coefficient in india remained almost constant for forty years 1951 92 with mean 32 6 and standard deviation 2 0 2 in contrast the variation in gini coefficients across countries is large 61 9 in honduras in 1968 compared with 17 8 in bulgaria in 1976 if substantiated these propositions have potentially significant implications for poverty the significance of the first is obvious barring any fundamental socio political change poverty reduction will depend crucially on the rate of economic growth given this the significance of the second is that in inegalitarian economies the poor will enjoy a smaller share of any national increment in income than in more egalitarian ones drawing on a new and expanded data set on inequality deininger and squire 1996a the first of the paper s three sections conducts standard statistical tests of the two propositions the sample comprises 573 observations on the most common measure of inequality the gini coefficient for 49 developed and developing countries covering the period 1947 94 the results broadly confirm our two propositions specifically analysis of variance anova shows that about 90 of the total variance in the gini coefficients

voter heterogeneity and political corruption abstract we show that policies that eliminate corruption can depart from socially desirable policies and this inefficiency can be large enough to allow corruption to live on political competition between an honest welfare maximiser and corrupt politicians is studied in our model the corrupt politician is at a distinct disadvantage there is no asymmetric information no voter bias and voters are fully rational yet corruption cannot be eliminated when voters have heterogeneous preferences

statistical tragedy in africa evaluating the data base for african economic development measurement is increasingly at the centre of debates in african economic development some remarkable upward revisions of gdp which are signs of statistical systems improving caused the declaration of a statistical tragedy in africa this special issue evaluates the database for african economic development with articles on the quality of the data on gdp health and education poverty labour agriculture and income distribution

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

the role of the structural transformation in aggregate productivity we investigate the role of sectoral differences in labor productivity in explaining the process of structural transformation the secular reallocation of labor across sectors and the time path of aggregate productivity across countries using a simple model of the structural transformation that is calibrated to the growth experience of the united states we measure sectoral labor productivity differences across countries productivity differences between rich and poor countries are large in agriculture and services and smaller in manufacturing moreover over time productivity gaps have been substantially reduced in agriculture and industry but not nearly as much in services in the model these sectoral productivity patterns generate implications that are broadly consistent with the cross country evidence on the structural transformation aggregate productivity paths and relative prices we show that productivity catch up in industry explains about 50 percent of the gains in aggregate productivity across countries while low relative productivity in services and the lack of catch up explains all the experiences of slowdown stagnation and decline observed across countries

juvenile crime and punishment evidence from japan over the last decade juvenile crime has become a serious social problem in japan the juvenile law was revised in 2001 to impose harsher punishment on juvenile offenders this revision makes it possible to impose criminal punishment on 14 and 15 year old criminal offenders while those offenders aged 16 19 have always faced criminal punishment both before and after the revision using this revision as a natural experiment this study conducts a difference in differences estimation to examine the effect of punishment on juvenile crime the analysis provides evidence that punishment can deter juvenile crime in addition this research examines the criminal behaviour of 13 year olds who face no change in punishment but who soon will in the near future the results suggest that the revision also had a negative impact on the criminal behaviour of these younger offenders

is corruption really bad for inequality evidence from latin america this article presents new evidence on the relationship between corruption and income inequality using a panel data methodology we find that lower corruption is associated with higher income inequality in latin america this result is in contrast to other empirical studies but it makes sense in latin america for a number of reasons the finding of an inverse relationship between inequality and corruption suggests that institutional reform policies by themselves may be misguided

the relationship between corruption and income inequality in u s states evidence from a panel cointegration and error correction model we investigate the causality between corruption and income inequality within a multivariate framework using a panel data set of all 50 u s states over the period 1980 to 2004 the heterogeneous panel cointegration test by pedroni oxf bull econ stat 61 653 670 1999 econom theory 20 597 627 2004 indicates that in the long run corruption and the unemployment rate have a positive and statistically significant impact on income inequality while a negative impact is found for real personal income per capita education and unionization rate the granger causality results associated with a panel vector error correction model indicate both short run and long run bidirectional causality between corruption and income inequality

the effect of prison population size on crime rates evidence from prison overcrowding litigation simultaneity between prisoner populations and crime rates makes it difficult to isolate the causal effect of changes in prison populations on crime to break that simultaneity this paper uses prison overcrowding litigation in a state as an instrument for changes in the prison population the resulting elasticities are two to three times greater than those of previous studies a one prisoner reduction is associated with an increase of fifteen index i crimes per year while calculations of the costs of crime are inherently uncertain it appears that the social benefits associated with crime reduction equal or exceed the social costs of incarceration for the marginal prisoner

the impact of income inequality on rental affordability an empirical study in large american metropolitan areas american metropolitan areas have experienced rising income inequality and worsening rental affordability in the past few decades has the rise of inequality caused worsening rental affordability t

the african growth miracle measures of real consumption based on the ownership of durable goods the quality of housing the health and mortality of children the education of youths and the allocation of female time in the household indicate that sub saharan living standards have for the past two decades been growing about 3 4 3 7 percent per year that is three and a half to four times the rate indicated in international data sets

reasonable doubt and the optimal magnitude of fines should the penalty fit the crime models of the enforcement compliance relationship have assumed that both the probability and magnitude of fines are independent choice variables of policy makers these models indicate that it may be optimal to monitor with lowfrequency but to inflict uniformly maximal penalties for all infractions detected this article shows that if the judicial system is built on the reasonable doubt test then the penalty and the probability of conviction are not independent in particular as the penalty increases the probability of conviction falls as a result uniformly maximal penalties may actually encourage crime rather than deter it this article shows that optimal fines should rise with the severity of the infraction that is the penalty should fit the crime models of the enforcement compliance relationship generally treat both the probability and magnitude of fines as independent choice variables of the government this approach has led becker 1968 and others to conclude that it is optimal to set uniformly maximal penalties for all crimes and to set the probability of conviction at the minimum level necessary to enforce compliance with the law while this normative prescription is natural and intuitive there still remains a larger positive question of why in most nations of the world penalties are not uniformly high but rather rise with the severity of the crime one possible resolution of the positive and normative questions may lie in the fact that penalties and probabilities of conviction are not generally independent convictions are typically determined by judges or jurors who are instructed to convict only if the evidence convinces them beyond a reasonable doubt that the accused is guilty psychologists however have found that a juror s willingness to convict may be influenced by more than just the evidence jurors are very sensitive to the potential penalties that defendants may pay

estimating the economic model of crime employment versus punishment effects ann dryden witte 1980 has recently argued in this journal that new support is found for the deterrent hypothesis or the economic model of crime when individual data are employed to estimate the determinants of rearrest rates witte estimates a conventional economic model of crime using a rich and carefully constructed microdata set of released prisoners in north carolina her principal findings are that 1 increases in the certainty and severity of punishment tend to reduce participation in crime measured by number of arrests or convictions per month free and 2 higher legal wages have an extremely weak deterrent effect on crime in this comment i describe two separate data sets within which i find just the opposite results using a sample of offenders released from federal prisons in 1972 i find that increases in the severity of punishment are weakly related to participation in crime while increases in the certainty of punishment are positively related to participation in crime in addition using a sample of male repeat property offenders released from maryland prisons i find that higher wages have a strong and consistent deterrent effect on crime the conclusion is reached at least from these data sets that improving legitimate employment opportunities may be as effective if not more effective in reducing crime as is an increase in punishment

construction corrupts empirical evidence from a panel of 42 countries the construction sector whether privately or publicly financed is characterized by potentially large rents and government intervention making it vulnerable to corruption consistent with this both case study and survey evidence has been provided highlighting the problem of malfeasance in this sector in this article we test the proposition that a bigger construction sector is likely to be inimical to clean government based on a panel of 42 countries over the period 1995 2011 we control for a range of potentially confounding variables and the expectation that corrupt public officials may favor the development of this sector because it increases the volume of rents available to them our empirical evidence shows that a larger construction sector will tend to increase perceptions of the extent to which public power is exercised for private gain

four factors that explain both the rise and fall of us crime 1970 2003 previous research has failed to explain the rise and fall of us crime since 1970 this study uses cointegration error correction and common long memory components analyses to demonstrate that four basic crime factors explaining both the increases in us violent and property crime between 1970 and 1991 and the dramatic declines in crime after 1991 the four factors include arrest rates income per capita the proportion of criminal justice resources devoted to drug crime and alcohol consumption error correction models and common long memory factors show an especially close link between crime rates and the percentage of prison resources devoted to drug offenders similar factors result in cointegrated models for murder rape robbery assault and larceny additional modelling shows that effective abortion rates computed along the lines of donohue and levitt 2001 do not help in explaining the rise and fall of us crime

decentralization and corruption evidence across countries the relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design the theoretical literature makes ambiguous predictions about this relationship and it has remained virtually unexamined by empiricists the authors make a first attempt at examining the issue empirically by looking at the cross country relationship between fiscal decentralization and corruption as measured by a number of different indices their estimates suggest that fiscal decentralization in government spending is significantly associated with lower corruption moreover they find that the origin of a country s legal system for example civil versus common legal code performs extremely well as an instrument for decentralization the estimated relationship between decentralization when so instrumented and corruption is even stronger the evidence suggests a number of interesting areas for future work including investigating whether there are specific services for which decentralized provision has a particularly strong impact on political rent extraction and understanding the channels through which decentralization succeeds in keeping corruption in check

bureaucratic corruption and the rate of temptation do wages in the civil service affect corruption and by how much abstract this paper presents what is to our knowledge the first empirical estimate of the effect of pay in the civil service on corruption first we show that theory is ambiguous on the relationship between civil service pay and corruption then we examine the issue using a new data set on wages for low income countries we find evidence of a statistically and economically significant relationship between relative civil service pay and corruption in regressions based on cross country averages where we control for a wide array of variables the relationship implies that a rather large increase in wages is required to eradicate corruption solely by raising wages

the injustice of inequality in many countries the operation of legal political and regulatory institutions is subverted by the wealthy and the politically powerful for their own benefit this subversion takes the form of corruption intimidation and other forms of influence we present a model of such institutional subversion focusing specifically on courts and of the effects of inequality in economic and political resources on the magnitude of subversion we then use the model to analyze the consequences of institutional subversion for the law and order environment in the country as well as for capital accumulation and growth we illustrate the model with historical evidence from gilded age united states and the transition economies of the 1990s we also present some cross country evidence consistent with the basic prediction of the model

the changing returns to crime do criminals respond to prices to what extent does crime follow the pattern of potential gains to illegal activity this article presents evidence on how criminals respond to this key incentive by reporting crime price elasticities estimated from a comprehensive crime dataset containing detailed information on stolen items for london between 2002 and 2012 evidence of significant positive crime price elasticities are shown for a panel of 44 consumer goods and for commodity related goods jewellery fuel and metal crimes the reported evidence indicates that potential gains are a major empirical driver of criminal activity and a crucial part of the economic model of crime the changing structure of goods prices helps to explain over 10 15 of the observed fall in property crime across all goods categories and the majority of the sharp increases in the commodity related goods observed between 2002 and 2012

hold your nose and vote corruption and public decisions in a representative democracy this paper analyzes how corruption alters policy decisions in democracy and examines whether this distortion can result in a long term persistence of corruption even when the voters are well informed and rational by applying a citizen candidate model of representative democracy the paper analyzes how corruption distorts the allocation of resources between public and private consumption altering the policy preferences of elected and nonelected citizens in opposite directions the outcome is a reduction in real public expenditure and if the median voter s demand for public goods is sufficiently elastic a reduction in taxes in this case some citizens benefit indirectly from corruption the paper also presents some empirical evidence that in democratic countries corruption results in lower tax revenue and proceeds to show that when this occurs citizens anticipating a shift in preferences in favor of public expenditure may support institutions that favor corruption this result complements the findings of other studies that have attributed the persistence of corruption in democracy to some failure on the part of the voters or the electoral system it also bears implications for developing effective anticorruption strategies and for redefining the role that can be played by the international community

inequality and media capture abstract popular support of redistributive policies depends on information they have about the tax system and efficiency of public projects mass media provides a convenient means for manipulating public opinion even when voters understand that the media can be biased i develop a theory of media capture in which the rich can influence information published in a media outlet at a cost the model shows that higher inequality is associated with lower media freedom this effect is stronger in democratic regimes i find empirical support for the model in both panel data and cross country analysis

the effect of police response time on crime clearance rates police agencies devote vast resources to minimizing the time that it takes them to attend the scene of a crime despite this the long standing consensus is that police response time has no meaningful effect on the likelihood of catching offenders we revisit this question using a uniquely rich dataset from the greater manchester police to identify causal effects we use a novel strategy that exploits discontinuities in distance to the response station across locations next to each other but on different sides of division boundaries contrary to previous evidence we find large and strongly significant effects in our preferred estimate a 10 increase in response time leads to a 4 7 percentage points decrease in the likelihood of clearing the crime we find stronger effects for thefts than for violent offences although the effects are large for every type of crime we find suggestive evidence in support of two mechanisms the likelihood of an immediate arrest and the likelihood that a suspect will be named by a victim or witness both increase as response time becomes faster we argue that under conservative assumptions hiring an additional response officer would generate a benefit in terms of future crime prevented equivalent to 170 of her payroll cost

accomplice witnesses and organized crime theory and evidence from italy we develop an agency model of organized crime accounting for the main trade offs involved in the introduction of an accomplice witness program we characterize the optimal policy and identify its main determinants in a framework where public officials can be dishonest our predictions are tested by using data for italy before and after the introduction of the 1991 accomplice witness program as predicted by the model and the earlier antitrust literature the program appears to have strengthened deterrence and enhanced prosecution moreover consistent with a novel prediction of our theory the evidence suggests that the program efficacy is affected by the judicial system efficiency

the worldwide governance indicators six one or none abstract aggregate indexes of the quality of governance covering large samples of countries have become popular in comparative political analysis few studies examine the validity or reliability of these indexes to partially fill this gap this study uses factor confirmatory factor and path analysis to test both measurement and causal models of the six worldwide governance indicators they purportedly measure distinct concepts of control of corruption rule of law government effectiveness rule quality political stability and voice and accountability rather than distinguishing among aspects of the quality of governance we find that they appear to be measuring the same broad concept

openness and the politics of potable water improving access to potable water has become an increasingly urgent concern for developing nations in the current era of globalization according to standard wisdom if developing countries undertake certain domestic reforms such as investing in infrastructure and engineering then safe and clean drinking water will improve this analysis uncovers however that in addition to such domestic efforts one of the greatest factors affecting water uncertainty is in fact internationally induced trade surprisingly both scholars and practitioners have neglected the potential impacts of expanding trade on access to potable water this analysis is the first large n cross national study of water that focuses on the interplay of trade and politics both international and domestic as the primary driving forces behind improvements in or constraints to water access the author hypothesizes that growing export pressures are constraining drinkable water in poor countries but a particular domestic condition can mit

measuring corruption in china an expenditure based approach using household survey data most existing micro level empirical analyses of corruption rely on administrative records special purpose surveys or field experiments which can be difficult or very costly to obtain in some situations in this paper we apply an expenditure based method of quantifying the extent of corruption in a particular country using household survey data this method utilizes discrepancies between consumption and reported income to measure corruption another contribution of this paper is that it provides the first objective estimate of the extent of corruption in china we use a quadratic clothing expenditure function to estimate the extent of corruption in china in 2002

an assessment of international trade related to bioenergy use in austria methodological aspects recent developments and the relevance of indirect trade abstract increasing international biomass trade for energy and concerns about sustainability of globally traded biomass have raised interest in assessments of cross border trade related to bioenergy within this paper approaches to overcome methodological difficulties related to biomass trade are proposed and applied for the case of austria biomass currently has a share of 15 5 in austria s primary energy consumption of 1354 pj 2009 according to energy statistics the rate of self sufficiency with biomass for energy defined as the ratio of domestic production to inland consumption with both imports and exports taken into account is 91 however feedstock imports for transport fuel production and indirect imports of wood based fuels wood processing residues and waste liquor of the paper industry originating from imported wood are not taken into account in energy statistics but prove to be of some significance imports of agricultural commodities to the amount of 9 7 pj can be attributed to domestic biofuel production and indirect imports of wood based fuels account for 31 pj with these import streams taken into account the share of domestic fuels in bioenergy use is only 67 rather than 84 as official energy statistics suggest on the other hand austria is exporting more than 50 of its production of sawnwood panelboard and paper products

bureaucratic corruption and income evidence from the land sector in bangladesh we examine for the first time the effects of corruption on income using household survey data from a developing country estimating the effects of corruption on income is challenging because of the simultaneous relationship between the two variables we use a two step instrumental variable approach to identify the effects of corruption on income we find that after adjusting for simultaneity bias the act of bribery reduces income and that higher bribes have a negative effect on income taken together our results provide a possible explanation why a vicious cycle between corruption and income inequality does not exist in the land sector in bangladesh

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

regional inequalities fiscal decentralization and government quality abstractregional inequalities fiscal decentralization and government quality regional studies there are theoretical arguments supporting the view that regional income inequalities the degree of fiscal decentralization and the quality of government are simultaneously determined this article argues that existing empirical work has failed to deal adequately with this possibility in light of this it applies a simultaneous equation model which accounts for the joint determination of these three variables to a panel of 23 organisation for economic co operation and development oecd countries the empirical evidence that emerges from the analysis suggests that a process of fiscal decentralization accompanied by measures to improve the quality of government would be an effective strategy for reducing regional inequalities

egalitarianism and international investment abstract this study identifies how country differences on a key cultural dimension egalitarianism influence international investment flows a society s cultural orientation toward egalitarianism is manifested by intolerance for abuses of market and political power and a desire for protecting less powerful actors we show egalitarianism to be based on exogenous factors including social fractionalization dominant religion circa 1900 and war experience from the 19th century we find a robust influence of egalitarianism distance on cross national flows of bond and equity issuances syndicated loans and mergers and acquisitions an informal cultural institution largely determined a century or more ago egalitarianism exercises its effect on international investment via an associated set of consistent contemporary policy choices but even after controlling for these associated policy choices egalitarianism continues to exercise a direct effect on cross border investment flows likely through its direct influence on managers daily business conduct

employment wages and alcohol consumption in russia 1 introductionconcerns regarding the relationship between alcohol consumption and labor market productivity are well grounded if problem drinking or alcoholism is considered a disease then it may have depressant effects on labor market productivity causing reductions in employment earnings and other labor market outcomes mullahy and sindelar 1993 1996 kenkel and ribar 1994 however there is a medical literature that documents a u shaped relationship between alcohol consumption and the risk of cardiovascular disease according to this literature moderate drinkers have a lower risk of cardiovascular disease than do either abstainers or heavy drinkers beaglehole and jackson 1992 doll et al 1994 consistent with this evidence several economists have found a positive association between moderate drinking and earnings berger and leigh 1988 french and zarkin 1995 heien 1996 hamilton and hamilton 1997 zarkin et al 1998 macdonald and shields 2001 this article investigates the impact of alcohol consumption on employment and wages in russia the primary contributions of the article are twofold first it enhances the economic literature on the relationship between alcohol consumption and labor market behavior by using data from a longitudinal survey the use of a longitudinal data set enables the estimation of a fixed effects model which helps avoid the potential bias caused by unobserved individual factors not captured in cross sectional models the use of a fixed effects model is an important extension to the literature because the data sets used in previous studies are cross sectional and usually lack adequate variables that could serve as identifying instruments to control for the endogeneity of alcohol consumption 1 furthermore the richness of the data set used in this article allows for the application of three alternative measures of alcohol consumption in the empirical analysis this is important because the relationship between alcohol consumption and labor market outcomes may be sensitive to the alcohol measure that is used the second notable contribution of this article is that it provides the first empirical evidence on the association between alcohol consumption and labor market outcomes in russia excessive alcohol consumption is a widespread problem in russia where per capita alcohol consumption is around 14 liters per year the world health organization who considers 8 liters to be a sign that a country has a critical consumption level for health problems quinn judge 1997 furthermore the dramatic fluctuations in mortality rates experienced in russia over the past 15 years have generated considerable attention to the potential effect of alcohol consumption on the overall health of the russian population it is important to investigate how labor market outcomes would be affected by alcohol consumption in a country which demonstrates such dramatic fluctuations in alcohol consumption and mortality consistent with the previous studies cross sectional results generally support the hypothesis of an inverse u shaped relationship between alcohol consumption and wages and employment results from the fixed effect models are found to be quite different from those of cross sectional models the positive effect of alcohol consumption on employment disappears for both males and females once the individual fixed effects are controlled for the results of the wage model lend support to a small and linear return to alcohol consumption but the effects are significant only at the 10 level the fixed effects estimates are smaller in magnitude and estimated with less precision compared with cross sectional estimates section 2 reviews the previous literature section 3 discusses the conceptual issues and empirical strategy section 4 introduces the data set section 5 provides a discussion of the results and sensitivity analyses section 6 concludes the article

the optimal use of fines and imprisonment abstract this paper examines the use of fines and imprisonment to deter individuals from engaging in harmful activities these sanctions are analyzed separately as well as together first for identical risk neutral individuals and then for two groups of risk neutral individuals who differ by wealth when fines are used alone and individuals are identical the optimal fine and probability of apprehension are such that there is some underdeterrence if individuals differ by wealth then the optimal fine for the high wealth group exceeds the fine for the low wealth group when imprisonment is used alone and individuals are identical the optimal imprisonment term and probability may be such that there is either underdeterrence or overdeterrence if individuals differ by wealth the optimal imprisonment term for the high wealth group may be longer or shorter than the term for the low wealth group when fines and imprisonment are used together it is desirable to use the fine to its maximum feasible extent before possibly supplementing it with an imprisonment term the effects of risk aversion of these results are also discussed

crime punishment and the market for offenses crime is a subject of intense emotions conflicting ideologies however economists have generally explained it as a reflection of individual choice and equilibrating market forces two major themes of the literature are outlined the evolution of a market model to explain the diversity of crime across time and space and the debate about the usefulness of positive versus negative incentives systematic analyses generally indicate that crime is affected on the margin by both positive and negative incentives there are serious limitations to the effectiveness of incapacitation and rehabilitation and optimal enforcement strategies involve trade offs between narrow efficiency and equity considerations

estimations of the economic model of crime using aggregate and individual level data much has happened in the economics of crime since becker s 1 seminal paper of two decades ago the theory has been refined by among others ehrlich 10 11 12 block and lind 4 5 block and heinke 3 and schmidt and witte 30 attempts to test the model empirically began immediately the most cited including ehrlich 10 11 12 sjoquist 31 carr hill and stern 7 phillips and votey 26 witte 38 and myers 22 23 interest continues with recent work including layson 19 sandelin and skogh 29 ehrlich and brower 13 cover and thistle 9 viscusi 36 and tauchen witte and griesinger 33 there has been some controversy however concerning the type of data more suitable to the estimation of the economic model of crime most of the work has used aggregate data in which the unit of observation is a political jurisdiction but the use of aggregate data has been sharply criticized the alternative is individual data few attempts have been made to use individual data probably because an ideally constructed data set representative of a general population would be far too costly for most research budgets most of the studies that have been done have used data on releasees from prison or other criminal justice programs they are in effect recidivism studies based on the economic model of crime

the changing structure of africa s economies data from the groningen growth and development center s africa sector database and the demographic and health surveys reveals that much of africa s recent growth and poverty reduction has been associated with a substantive decline in the share of the labor force engaged in agriculture this decline is most pronounced for rural females over the age of 25 who have a primary education it has been accompanied by a systematic increase in the productivity of the labor force as it has moved from low productivity agriculture to higher productivity services and manufacturing although the employment share in manufacturing is not expanding rapidly in most of the low income african countries the employment share in manufacturing has not peaked and is still expanding albeit from very low levels more work is needed to understand the implications of these shifts in employment shares for future growth and development in africa south of the sahara

criminal sentences as endogenous taxes are they just or efficient crime is a negative externality that arises out of the personal freedom afforded individuals in most societies society seeks to control crime through various means mainly imprisonment one can conceive of criminal sentences as pigouvian taxes that are costly to administer 1 the literature on optimal harm correcting taxes is usually normative that is the planner is assumed to be at liberty to choose taxes that maximize some objective function 2 in many circumstances it may be preferable to think of taxes in this case criminal sentences as endogenous variables the outcomes of conscious political or judicial decision making in the absence of perfectly functioning markets underlying political or judicial decisions endogeneity may not beget optimality for the case of criminal sentencing frank easterbrook argues that the discretion exercised by prosecutors judges and parole authorities causes the crimi

collectivism and corruption in bank lending this paper examines how national culture and collectivism in particular influences corruption in bank lending we hypothesize that interdependent self construal and particularist norms in collectivist countries lead to a higher level of lending corruption through their influence both on the interactions between bank officers and bank customers and on the dynamics among bank colleagues using a sample covering 3835 firms across 38 countries we find strong evidence that firms domiciled in collectivist countries perceive a higher level of lending corruption than firms domiciled in individualist countries in terms of economic magnitude the effect of collectivism is substantially larger than the effects of other cultural dimensions uncertainty avoidance masculinity and power distance and institutional factors identified in prior studies bank supervision bank competition information sharing and media monitoring we further find that the positive relationship between collectivism and lending corruption is not driven by endogeneity and that it is robust to different measures of bank corruption different measures of collectivism and different estimation methods finally we find that the link between collectivism and lending corruption cannot be explained by the role of the government in the economy political connections biased responses from disgruntled borrowers or relationship lending

why do increased arrest rates appear to reduce crime deterrence incapacitation or measurement error this paper attempts to discriminate between deterrence incapacitation and measurement error as explanations for the negative empirical relationship between arrest rates and crime measurement error cannot explain the observed patterns in the data incapacitation suggests that an increase in the arrest rate for one crime will reduces all crime rates deterrence predicts that an increase in the arrest rate for one crime will lead to a rise in other crimes as criminals substitute away from the first crime empirically deterrence appears to be the more important factor particularly for property crimes jel k42

income inequality redistribution and domestic terrorism abstract we analyze the effect of income inequality on terrorism for a sample of 113 countries between 1984 and 2012 we provide evidence robust to various methodological changes e g the use of instrumental variable approaches that higher levels of income inequality are associated with more domestic terrorism analyzing the underlying transmission channels we find that this effect is in parts due to the ill effects of income inequality on institutional outcomes e g corruption which in turn motivate domestic terrorism we also investigate whether redistributional efforts can be effective in reducing terrorist activity we find that countries that redistribute more see less domestic terrorism in parts because redistribution improves institutional conditions in light of this latter finding we discuss the implications of our analysis for policymakers who want to counter domestic terrorism through redistributive policies