the futile quest for a grand explanation of long run government expenditure this paper carries out a critical reappraisal of the two contending theories purporting to explain long run government spending wagner s law and different variants of the ratchet effect we analyze data spanning from the early 19 th century until the present day in sweden and the united kingdom hence in contrast to previous studies we evaluate the validity of wagner s law and the ratchet effect hypothesis over a very long time period starting at the beginning of industrialization cointegration analysis is used to investigate the long run relationships between government expenditure and gdp focusing on sub periods and structural breaks moreover we test the ratchet effect hypothesis by estimating models which allow for asymmetric adjustment according to our main results wagner s law does not hold in the long run although the data are consistent with wagner s law between roughly 1860 and the mid 1970s this can be traced to the formation of the modern public sector including the introduction of public education health care and so forth yet wagner s law did not hold during the initial industrialization phase before 1860 and in recent periods gdp only affects the government spending share when we control for population age structure finally we find some evidence of asymmetric adjustment in the uk particularly in the post wwii period however the ratchet effect is not a general cause of the growth of government spending

an empirical re examination of wagner s law abstract it is argued in this paper that for a more meaningful test of wagner s law allowance must be made in regard to prevalence of peace and stability using six different versions and employing both nominal and real data from ten states of the united states wagner s law is vindicated

growth effects of public expenditure on the state and local level evidence from a sample of rich governments there is a vast empirical literature investigating the relationship between government size and economic growth but the empirical evidence of growth effects of public expenditure using cross country regressions is still inconclusive according to a number of authors this is not surprising since the negative relationship only applies for rich countries with a large public sector restricting their analysis on rich countries only they can show the predicted negative impact naturally a selection of a sub sample of rich countries is always somewhat arbitrary another possibility is to concentrate on governments within a rich country however only few studies investigate the effect of state and local spending on economic growth this study concentrates on the relationship between public expenditure and economic growth within a rich country using the full sample of state and local governments from switzerland over the 1981 2001 period the general finding is a fairly robust negative relationship between gov

perfect equilibria in a negotiation model rubinstein s alternating offers bargaining model is enriched by assuming that players payoffs in disagreement periods are determined by a normal form game it is shown that such a model can have multiple perfect equilibria including inefficient ones provided that players are sufficiently patient delay is possible even though there is perfect information and the players are fully rational the length of delay depends only on the payoff structure of the disagreement game and not on the discount factor not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs indeed some negotiation games have a unique perfect equilibrium with immediate agreement

a test of the wagner s hypothesis for the fiji islands in this article we examine wagner s law for fiji for the period 1970 to 2002 using the johansen 1988 test for cointegration we find one cointegration relationship between national output and government expenditure using five different long run estimators we find robust results on the impact of national income on government expenditure the elasticity ranges from 1 36 to 1 44 implying that a 1 increase in income leads to a 1 36 1 44 increase in government expenditure moreover we find that in the long run national income granger causes government expenditure while these results are consistent with wagner s law we warn policy makers that because fiji s total debt stands at around 69 of gdp in future the bulk of expenditure will go towards debt financing at the expense of productive sectors

the choice of regulatory instrument when there is uncertainty about compliance with fisheries regulations noncompliance is an important problem for fisheries regulators and a number of studies have considered optimal enforcement issues within fisheries regulation our article extends this literature by studying the implications of noncompliance for the choice between tax and quota regulation we first develop a general stock recruitment model of a search fishery with illegal landings and show that compliance uncertainty where the regulator is uncertain about the extent of noncompliance generates an efficiency advantage for taxes over individual transferable quotas we also provide evidence that uncertainty about compliance is an important source of uncertainty for regulators copyright 2008 oxford university press

causality between public expenditure and national income this paper deploys the granger method to determine the directions and patterns of causality between national income and total as well as various components of public expenditure empirical results based on the data for india 1950 81 suggest that while at the disaggregate level the causal process is rather diverse it is essentially feed back type at the aggregate level it neither confirms the wagnerian income public expenditure nor the keynesian public expenditure national income view the paper recommends that two variables be treated as jointly dependent in both the public finance and macroeconometric studies

fisheries management and operations research abstract fisheries are subject to a deep rooted problem of economic inefficiency often referred to as the fisheries problem the fisheries problem derives fundamentally from inappropriate social institutions controlling the fishing activity the foremost of which is the common property arrangement fisheries management consists of replacing these institutions with more appropriate ones which institutions are most appropriate depends on the social objectives of the fisheries there are strong economic arguments for the view that there should be only a single objective namely to maximize the present value of the flow of benefits from the fisheries in reality different interest groups often push for several often conflicting objectives in that case a multi objective programming approach may be appropriate a set of institutions to manage fisheries is referred to as the fisheries management regime the fisheries management regime consists of a i fisheries management system ii fisheries enforcement system and iii fisheries judicial system each one of these has to be appropriately designed and implemented the efficacy of the overall fisheries management regime cannot be greater than that of its weakest link at the same time it is of the greatest importance to keep an eye on the cost of fisheries management global evidence suggests that the cost of fisheries management often constitutes a substantial fraction of the value of the harvest the problem thus is to strike the right balance between the efficacy of the fisheries management regime and its cost of design implementation and operation the problem of fisheries management is by its nature multidisciplinary it involves marine ecology and biology mathematics economics game theory political science and anthropology to name a few the problem is moreover typically quite complex requiring powerful modelling and calculation techniques in many respects this is the kind of problem operations research techniques are designed to deal with

the government expenditure economic growth relation in japan an analysis by using the adl test for threshold cointegration based on annual data from japan for the period 1960 to 2010 we investigate the government expenditure economic growth relation in japan by using the autoregressive distributed lag test for threshold cointegration developed by li and lee 2010 in particular we evaluate the validity of wagner s view and the keynesian view in the case of japan the empirical results presented herein indicate that of these two classical economics perspectives only wagner s view holds for japan the findings also demonstrate that the adjustment process towards its long run equilibrium is asymmetric

the economics of enforcing pollution taxation abstract the efficient structure of pollution tax policy is examined when it is recognized that enforcing compliance will be costly there are two components of this cost 1 the direct cost of enforcement and 2 the cost polluters incur avoiding enforcement considering only the first cost the efficient pollution policy calls for a tax in excess of that conventionally recommended as efficient t but with little enforcement once avoidance cost is recognized the efficient policy can be substantially altered requiring a tax lower than t but with greater enforcement even when direct enforcement cost is zero it is shown that there is no unique advantage to t in the absence of avoidance cost

harvesting and conservation in a predator prey system abstract optimal harvesting of prey in a predator prey ecosystem is studied under the condition that the existence of the predator has value predators birds and humans fishers compete for prey shellfish the behavior of the system is studied and conditions for optimal control are deduced various optimal harvest rates are identified for particular ecosystem and economic parameters we discuss optimal harvest rates focusing on system characteristics that lead to the survival of birds the approach path towards an optimal regime is shown qualitatively for different types of optimal harvest regimes

estimating the permanent income elasticity of government expenditures evidence on wagner s law based on oil price shocks this paper provides instrumental variable estimates of the permanent income elasticity of government expenditures it uses annual variation in the international oil price weighted with countries average oil net export gdp shares as a plausibly exogenous source of within country variation in countries permanent income the short run estimates of the permanent income elasticity are robust across alternative specifications and are below one the estimated elasticity coefficients range between 0 3 and 0 6 and have standard errors of 0 1 and 0 4 respectively point estimates of long run elasticities are somewhat larger but still smaller than unity the investment component of government spending is found to be more elastic than the consumption component whereas elasticity differences between rich and poor countries are insignificant

trust and communication mechanisms for increasing farmers participation in water quality trading trust and communication barriers have contributed significantly to the lethargic performance of many point nonpoint source water quality trading programs farmers are often reluctant to participate despite direct financial incentives yet the literature lacks a comprehensive investigation of how the social context affects trading outcomes we draw on social embeddedness theory to analyze three mechanisms of communicating with farmers and conduct a case study analysis of 12 water quality trading programs we find that employing trustworthy third parties or embedded ties may reduce farmers reluctance to participate although the most effective mechanism ultimately depends on local conditions and program objectives

co integration and error correction models the temporal causality between government taxes and spending several interesting papers have recently considered whether government taxes granger cause government spending or vice versa the findings based on standard granger 6 causality tests are not consistent manage and marlow 10 conclude that when evidence of one way causality exists federal taxes granger cause federal spending while anderson wallace and warner 1 conclude that the evidence supports one way causality in the opposite direction ram 11 reexamining the issue concludes that taxes granger cause spending at the federal level but that spending granger causes taxes at the state and local level von furstenberg green and jeong 13 in another related article examine the tax and spend spend and tax causality issue using a more general vector autoregressive var model they introduce in addition to federal taxes and spending two economic variables the gnp gap and the inflation rate decompose federal spending into several categories and remove the effects of automatic stabilizers when appropriate they find little evidence that taxes granger cause spending and limited evidence that spending causes taxes a finding which corresponds most closely to that of anderson wallace and warner 1 our purpose is to reconsider the causality issue with the aid of co integration and errorcorrection modeling our analysis illustrates with a specific example how sources of causality can be neglected in standard granger causality tests moreover addressing the question of temporal causality between government taxes and spending provides insight as to how different policies might or might not help control the growth of government the results of our estimating various co integration and error correction models with quarterly data suggest bi directional causality between government taxes and spending both for the federal and state and local sectors this finding counters the conclusions of previous studies when annual data are used however our

quota enforcement in resource industries self reporting and differentiated inspections quotas are frequently used in the management of renewable resources and emissions however in many industries there is concern about their basic effectiveness due to non compliance we develop an enforcement model of a quota regulated resource and focus on a situation with significant non compliance and exogenous constraints on fines and enforcement budget we propose a new enforcement system based on self reporting of excess extraction and explicit differentiation of inspection rates depending on compliance history we use differentiated inspections to induce firms to self report excess extraction this system increases the effectiveness of the quota by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement while ensuring an efficient allocation of extraction in addition inspection costs can be reduced without reductions in welfare

lag length selection and tests of granger causality between money and income one of the most widely accepred relationships in macroeconomics is the positive relationship between the rate of growth of the money supply and the rate of growth of income a diversity of opinion arises however with the attempt to identify a causal relationship between these variables while friedman and schwartz 1963 initiated the empirical investigation of money income causality sims 1972 made the most significant contribution to this literature with a practical application of the criterion developed by granger 1969 for identifying a causal relationship since the appearance of sims s approach and an alternative one advanced by sargent 1976 many researchers have applied these techniques to the investigation of the causal relationship between money and income l with two exceptions hsiao 1981 and mcmillin and fackler 1984 these researchers have arbitrarily chosen the lengths of their distributed lags the purpose of this paper is to test for granger causality between money and income this paper differs from previous work in that considerably more attention is focused on the effect of the lag specification on the test results in particular we investigate the extent to which rules of thumb arbitrary lag specifications and

the perception of man and the conception of society two approaches to understanding society the social sciences offer two distinct approaches to understanding society one originated with the scottish moral philosophers and shaped the discipline of economics the other emerged from the french enlightenment and influenced the study of sociology the two approaches are based on radically different perceptions of man and man s relation to society this paper explores these alternative hypotheses and examines some major implications it concludes that the hypothesis reaching back to the scottish philosophers provides the basis for a unified approach in the social sciences

local rulemaking enforcement and compliance in state owned forest commons abstract the literature on rule compliance is divided between those urging greater autonomy for stakeholders in rulemaking processes and those arguing for increased enforcement however recent experimental evidence highlights the potential for synergies between participatory rulemaking and enforcement this paper therefore seeks to build upon these findings to explore the relationship between local rulemaking local monitoring and compliance in field settings the results which draw upon data about the behavior of 93 fuelwood user groups in state owned forest commons in asia africa and latin america suggest that the average group is more likely to comply with rules when local rulemaking is combined with local monitoring however in some contexts it appears that local rulemaking in particular and other institutional arrangements in general may yield similar results

an econometric test of wagner s law for six countries based on cointegration and error correction modelling techniques the present study empirically examined five different versions of wagner s law by employing annual time series data on six countries over the period 1951 1996 three countries are part of the emerging industrialized countries of asia south korea taiwan thailand and three are industrialized countries japan usa and the united kingdom the analysis is an advance over previous work in two ways first the stationarity propertities of the data and the order of integration of the data are empirically investigated using the augmented dickey fuller adf and the kwiatkowski et al journal of econometrics 1 1992 kpss tests and second the hypothesis of a long run relationship between income and government spending is tested using bivariate cointegrated systems and employing the methodology of cointegration analysis as suggested by johansen journal of economic dynamics and control 12 1988 and johansen and juselius oxford bulletin of economics and statistics 52 1990 the results indicate that

repeated games with differential time preferences when players have identical time preferences the set of feasible repeated game payoffs coincides with the convex hull of the underlying stage game payoffs moreover all feasible and individually rational payoffs can be sustained by equilibria if the players are sufficiently patient neither of these facts generalizes to the case of different time preferences first players can mutually benefit from trading payoffs across time hence the set of feasible repeated game payoffs is typically larger than the convex hull of the underlying stage game payoffs second it is not usually the case that every trade plan that guarantees individually rational payoffs can be sustained by an equilibrium no matter how patient the players are this paper provides a simple characterization of the sets of nash and of subgame perfect equilibrium payoffs in two player repeated games

the power to hurt costly conflict with completely informed states according to common explanations of war since war is costly and risky rational states have incentives to strike a bargain and avoid conflict war is then the result of private information about capabilities or resolve and incentives to misrepresent this information or inability to make credible commitments fearon 1995 this article presents another rationalist explanation which does not depend on either of these mechanisms by modeling warfare as a costly bargaining process the paper demonstrates that inefficient fighting can occur in equilibrium under very general assumptions favoring peace specifically it is assumed that peace can be supported in equilibrium and that fighting brings no benefits to either state only costs despite the fact that there exist many agreements that pareto dominate the final settlement states are unable to agree to them and fighting can occur in equilibrium the equilibrium is driven by the ability of states to impose costs on their opponent and bear costs the power to hurt the opponent establishes a range of acceptable settlements and the existence of such a range makes inefficient equilibria possible the article suggests that 1 states may fight if they believe that seeking peace means accepting an unpalatable settlement and 2 a diminished ability to hurt the enemy is a major reason for war termination historical examples are provided to illustrate these results

modeling the dynamics of regulated resource systems a fishery example abstract in this paper a discrete time model of regulated fisheries is developed this class of models is interesting because most modern real world fisheries are under some kind of regulation the regulatory part of the fishery in this paper is partitioned into two stages in the first stage which is the main focus total allowable catch quotas tacs based on biological and economic considerations are determined in a way that guarantees the safety of the stock from a conservation viewpoint in addition we assume that a target biomass level is set by the management authorities to be achieved over a given time horizon to satisfy an economic objective since we assume here that the main goal is to rebuild the stock we propose a gradual approach to the target biomass level via a simple recursive rule

the use of trade measures against illicit fishing economic and legal considerations illegal unreported and unregulated iuu fishing activities are a threat for both the marine environment and society by undermining effective management systems iuu fishing activities affect economic performance social welfare and compliance decisions so far traditional control and surveillance like measures have had a limited success in deterring iuu fishing so this paper aims at throwing light on several forms of trade related initiatives that can be more effective the paper suggests that both the effectiveness and further development of such measures strongly depend on the way they are designed especially with respect to their trade law compatibility however current discussions on future trade based policy developments within some key economic areas suggest that trade measures are a sound option for policy makers while the paper focuses on fisheries issues it is also expected to inform the international debate surrounding the sustainable use of natural resources in general as many sectors face similar biodiversity and trade challenges e g tropical forest mangroves etc

strategic dynamic interaction abstract the motivation for this paper is fishing legislation that divides a fishery into regions each of which is exploited by a single firm as the regions have common borders an analysis based on models with one firm and one region would lead to erroneous results an alternative motivation is the problem of a fishery with several interacting species each exploited by a single firm in this paper we assume that fish move between regions therefore the stock in one region depends not only on previous stock and catch in the region but also on the stock and catch in neighboring regions in the multiple species interpretation these movements correspond to the interactions between species we use a multisectoral differential duopoly model in order to capture the strategic interactions of the firms over time the model is solved for an example in which varying levels of dependence between regions can be compared

a bound testing analysis of wagner s law in nigeria 1970 2006 this study tests wagner s law the tendency for government activities to expand along with economic expansion for nigeria using annual time series data between 1970 and 2006 it adopts the bounds test approach proposed by pesaran et al 2001 based on unrestricted error correction model uecm and toda and yamamoto s 1995 granger noncausality tests empirical results from the bounds test indicate that there exists no long run relationship between government expenditure and output in nigeria in addition toda and yamamoto s 1995 causality test results show that wagner s law does not hold for more than the period being tested rather we found a weak empirical support in the proposition by keynes that public expenditure is an exogenous factor and a policy instrument for increasing national income

incentives for cooperation the effects of institutional controls on common pool resource extraction in cambodia cooperation among humans is highly dependent on social and institutional conditions with individual incentives playing a key role in determining the level of cooperation achieved understanding the conditions under which cooperation can emerge has important implications for the design of resource management and wildlife conservation interventions incentive based conservation approaches are being widely implemented yet very few studies test the role of incentives in promoting cooperation in relevant developing country contexts using a common pool resource game in four villages in cambodia we investigated how the level of within group cooperation varies under different institutional arrangements including opportunities for social approval external enforcement of rules and individual and collective incentive payments our results demonstrate the significance of self organisation the ability to devise monitor and enforce a set of rules among resource users treatments which promoted self organisation had the greatest effect in reducing individual extraction achieved the greatest efficiencies and had the strongest interaction with group decision making in reducing extraction the effects of these treatments carried over to reduce extraction in subsequent treatments irrespective of their institutional arrangements these results suggest that policies designed to incentivise certain behaviour in local stakeholder groups may be more successful if they create opportunities for local decision making

integration and productivity satellite tracked evidence this paper introduces satellite tracked real time data from a large fishing firm managing its vertically horizontally and geographically linked ships to study the causal impact of integration on total factor productivity tfp after the firm acquired its vertically unintegrated contractual fish suppliers tfp increased 16 among newly integrated ships whereas it did not vary for already owned ships some classic mechanisms such as increased effort due to monitoring do not systematically explain tfp gains under integration whereas evidence on hold up threat alleviation is mixed importantly enhanced knowledge transfer and hierarchical authority enacting productivity improving operational practices among newly integrated ships are more likely explanations of the results this paper was accepted by bruno cassiman business strategy

the added worker effect abstract this paper uses the gross change data and cointegration error correction modeling to test the hypothesis of added worker effect in the u s labor market it is shown that prime age males unemployment u m and flows from unemployment to out of the labor force un m cause an increase in prime age and young females flows from not in the labor force keeping house to employment and decrease their flows into unemployment

minimum information management systems and itq fisheries management abstract in 1986 new zealand reformed its fisheries management regime with the introduction of a rights based system of management at the beginning of each fishing season a government agency sets an allowable commercial catch individual firms hold an entitlement to harvest a share of the allowable commercial catch to date the government agency has relied almost exclusively on the results of stock assessment research when setting the allowable harvest excessive reliance on biological data in fisheries management has attracted criticism an alternative a minimum information management system uses information contained in quota prices as a guide to set limits on commercial harvest this paper examines price formation in one quota market we find evidence in the data that supports the use of quota prices to guide the setting of limits to commercial harvest furthermore time series analysis provides a basis for studying the temporal response of changes in asset prices to perturbations in the allowable harvest the results illustrate how information summarized in quota prices can complement the findings of stock assessment research in fisheries management

wagner s law revisited cointegration and causality tests for new zealand wagner s law states that the share of government expenditure in gross national product gnp will increase with economic development many associated empirical studies substitute gnp with gross domestic product gdp this article presents an empirical investigation into the validity of wagner s law for new zealand over the period 1960 to 2007 and compares the results obtained using these two measures of output application of the autoregressive distributed lag ardl bounds test suggests a cointegrating relationship between either output measure and the share of government spending and further application of general to specific gets engle and granger eg phillip hansen s fully modified ordinary least squares fmols and johansen s time series techniques illustrate statistical robustness and an income elasticity between 0 56 and 0 84 the results suggest that output measures granger cause the share of government expenditure in the long run thereby providing support for wagner s law and these resul

dynamic use of closures and imperfectly enforced quotas in a metapopulation the dynamic efficiency of closures in bioeconomic systems depends upon stock levels and in situ values that evolve over time and on relative costs of implementation a model of a harvested metapopulation is presented in which second best reduction of harvest from open access levels using input quotas balances monitoring costs against dynamic benefits of mitigating overharvesting temporary or permanent closures though generally still second best are preferable to quotas under certain conditions as demonstrated for a representative patch and time period interactions between patches are discussed numerical solutions illustrate comparative dynamics of closure use and show their potential benefits in a dynamic regulatory path

managing interacting species in unassessed fisheries abstract this paper addresses the management of multispecies fisheries and suggests the use of restricted fishing policies as an interesting option for unassessed fisheries as is the case within developing countries specifically we consider a predator prey system under two potential management policies an unrestricted regime where agents can compete to harvest from both species and a second one where they are allowed to harvest only predators the performance of both policies is compared from an ecological and an economic point of view for a sufficiently large number of agents or for strong biological interaction parameters the assumed restricted fishing policy yields both higher long run stock levels and profits thus this contribution suggests that such a policy while requiring weaker monitoring governance than instruments based on outputs such as quotas or taxes would meet environmental and economic objectives finally several features of the analysis are discussed including targeting prey instead of predator and the issue of compliance

economic man as a moral individual first there is the broadly ethical question how should one live to emphasize this connection is not the same as asserting that people will always act in ways they will themselves morally defend but only to recognize that ethical deliberations cannot be totally inconsequential to actual human behavior sen 1988 3 4 i introduction it is a plausible proposition that some people s behavior is affected significantly by moral considerations a growing literature in economics and related disciplines reviewed and analyzed in earlier work by two of the authors goldfarb and griffith 1991a griffith and goldfarb 1991b explores the possibility and desirability of incorporating these moral considerations into the economic analysis of individual behavior 1 a variety of approaches to introducing moral considerations into economic analysis have been put forward by contributors within economics including sen 1974 1977 1988 hirschman 1985 phelps 1975 vanberg 1988 brunner 1987 frank 1987 1988 hirshleifer 1985 mueller 1986 and schotter 1981 among others among related disciplines the philosophers gauthier 1986 and ulman margalit 1977 the sociologists coleman 1987 and etzioni 1986 1988 and the political scientist axelrod 1984 all present relevant analyses as our earlier review indicated these authors pursue three competing approaches introducing moral values as part of preference functions introducing moral norms or rules as constraints and introducing such norms as decision rules for coping with strategic interaction gaming situations we propose here a concrete method for including moral values in the economist s model of preferences our method maintains the standard economic framework of an agent maximizing his or her utility subject to constraints but modifies the utility function so that the enjoyment or utility from consuming a given set of goods varies in a lumpy or discontinuous way depending on the concurrent moral content of the individual s behavior moreover it offers an analytical representation of the linkage between preferring to act morally and the individual s being faced with possibly significant differences in constraints because of such moral considerations 2 the paper proceeds as follows section ii indicates where our approach fits in the existing literature incorporating moral values into preference functions section iii sets forth our approach to specifying these utility functions section iv suggests some extensions section v presents further discussion and conclusions ii relation to the literature while not directly inspired by the occupational choice literature our approach can be usefully viewed as an application of the economic model of occupational choice to modelling moral preferences 3 this approach helps fill an analytical gap between hochman and rodgers 1969 small modification of the standard microeconomic framework and the more extensive departures suggested by etzioni 1986 and sen 1974 1977 our model helps fill this gap by providing what we think is an intuitively appealing treatment of the discontinuous or lumpy content of important classes of moral decisions hochman and rodgers 1969 present an analysis of the possible relationship between moral and other values in the context of charitable transfers their analysis is now a standard ingredient in intermediate microeconomics textbooks 4 their interdependent utility approach puts impoverished individual y s income or utility into individual x s utility function one then analyzes the conditions under which individual x will either himself transfer resources to individual y or vote for a government program to make such a transfer this approach allows transfers that vary continuously from zero to very large amounts of money with decisions involving trade offs at the margin for our purposes this marginal trade off feature so useful for analyzing charitable transfers presents a very significant limitation when attempting to apply the model to a wider range of moral behavior

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

wagner s law versus displacement effect abstractthe public sector has grown dramatically over the past few centuries in many developed countries in this article we use wavelet methods to distinguish between two leading explanations for this growth wagner s law and the displacement effect in doing so we use the long term data of 10 oecd countries for a maximum time span of 1800 2009 we find that the validity of wagner s law is likely to vary strongly over time for each country a roughly similar feature in most of the countries is that the law is less valid in the earliest stage of economic development as well as in the advanced stages with the validity tending to follow an inverted u shaped pattern with economic development further our results indicate that the long run growth of government size cannot be adequately explained by wagner s law on the other hand the displacement effect appears to account for the bulk of the growth in most of the countries

testing wagner versus keynes using disaggregated public expenditure data for canada this paper attempts to test wagnerian versus keynesian hypotheses by examining the relationship between national income and total public expenditure as well as its various components for canada during the period 1950 1995 engle and granger s two step cointegration and error correction techniques are employed to test these two hypotheses the results of this study support both the hypotheses when tested with broader aggregate expenditure data i e total government current expenditure ce and total current expenditures on goods and services cegs although the results of this study do not support the existence of any long run relationship between gdp and the disaggregated public expenditure variables they do support the existence of short run causation implying that national income may be causing or caused by a component of the total government current expenditure in the short run

further investigations into the factors affecting compliance with uk fishing quotas this paper reports the results of a more recent study of quota compliance in the u k fishery that was investigated in an earlier article in this journal hatcher et al 2000 the study collected more detailed data on fishermen s perceptions and experience of enforcement and sought to measure the financial incentive to cheat in addition whereas the earlier study used a binary approach to modelling the data we employed an orderedresponse model and included a number of scale regressors without transformation although we still find some evidence of normative influences on violation levels the results suggest that conventional economic incentives predominate in the fishery

partial enclosure of the commons abstract we examine the efficiency distributional and environmental consequences of assigning spatial property rights to part of a spatially connected natural resource while the remainder is competed for by an open access fringe we refer to this as partial enclosure of the commons we obtain sharp analytical results regarding partial enclosure of the commons including 1 while second best it typically improves welfare relative to no property rights 2 all resource users can be made better off 3 positive rents arise in the open access area and 4 the resource maintains higher stocks under spatial heterogeneity we also characterize spatial regions that are ideal candidates for partial enclosure typically society should seek to enclose those patches with high environmental productivity and high self retention but whether high economic productivity promotes or relegates a patch may depend on one s objective

fishing as a supergame abstract this paper considers how cooperative solutions to games of sharing fish resources can be supported by threat strategies with highly mobile fish stocks the number of agents compatible with a cooperative self enforcing solution is not very high for reasonable values of the discount rate but sensitive to changes in the discount rate and costs and to cost heterogeneity with migrating stocks where growth and reproduction depend on how much all agents leave behind after harvesting the likelihood of a cooperative self enforcing equilibrium is increased with a dominant player and a competitive fringe the rents and optimum stock level of the dominant player fall quickly as the share of the competitive fringe increases

risk preference and the work leisure trade off the paper investigates the interrelationships between the wage rate period of employment work leisure choice and the attitude toward risk the model makes risk preference endogenous given external forces acting on individual choice beginning with assumptions normally considered consistent with risk aversion namely concave utility with respect to leisure and wealth along with perfect markets rational behavior consistent with the insurance buying gambler is shown to be a reasonable possibility the theory also provides an explanation for the repeating gambler paradox

in search of homo economicus behavioral experiments in 15 small scale societies we can summarize our results as follows first the canonical model is not supported in any society studied second there is considerably more behavioral variability across groups than had been found in previous cross cultural research and the canonical model fails in a wider variety of ways than in previous experiments third group level differences in economic organization and the degree of market integration explain a substantial portion of the behavioral variation across societies the higher the degree of market integration and the higher the payoffs to cooperation the greater the level of cooperation in experimental games fourth individual level economic and demographic variables do not explain behavior either within or across groups fifth behavior in the experiments is generally consistent with economic patterns of everyday life in these societies

normative and social influences affecting compliance with fisheries regulations economic models of regulatory compliance in fisheries usually assume an instrumental determination of individual behavior in which the decision to comply or to violate depends primarily on the expected monetary costs and benefits policy implications tend as a result to focus only on deterrence that is increasing the expected monetary costs of violation more complete models of compliance behavior take into account factors such a social influence moral values and the perceived legitimacy of regulations and the regulatory authority the paper describes an investigation into the non monetary factors affecting compliance with output quota restrictions among fishermen in the united kingdom

socio ecological explanations for crowding out effects from economic field experiments in southern africa abstract economic and psychological literature mentions three conditions under which the crowding out effect of pro social behaviour is likely to occur and to crowd out citizens moral obligations to behave co operatively i use a framed field experiment on joint extraction from a common pool resource cpr where the crowding out effect has already been reported before in combination with the trust game carried out in farming communities of namibia and south africa to replicate these conditions the research design and the cross cultural setting enable to explicitly control for these effects the results of the experiments support that the crowding out effect depends on the nature of the external intervention controlling vs supportive external intervention the degree of participants self determination high vs low self determination in the group a society s norms of trust and reciprocity high vs low trust within the society the results imply that outside regulations aiming to conserve natural resources risk worsening the situation when neglecting democratic legitimization as well as local community norms

optimal harvesting of ecologically interdependent fish species abstract the optimal exploitation of a two species predator prey system is considered using lotka volterra type equations due to the density dependence of ecological efficiency both species should be harvested simultaneously over a range of relative prices beyond the limits of this price range either the prey species should be utilized indirectly by harvesting the predator or the predator should be eliminated to maximize the prey yield neglecting harvesting costs the simultaneous harvest of prey and predators requires that a unit of prey biomass increase in value by being processed by predators certain results from single species fishery models are shown not to apply to multispecies models these are as follows i optimal regulation of a free access fishery may call for subsidizing instead of taxing the harvest of predator species ii increasing the discount rate may at moderate levels imply that the optimal standing stock of biomass increases instead of decreasing iii a rising price or a falling cost per unit fishing effort of a species may raise and not lower the optimal standing stock of that species

optimal cartel equilibria with imperfect monitoring abstract there exist optimal symmetric equilibria in the green porter model 4 8 having an elementary intertemporal structure such an equilibrium is described entirely by two subsets of price space and two quantities the only production levels used by firms in any contingency the central technique employed in the analysis is the reduction of the repeated game to a family of static games

extreme equilibria in the negotiation model with different time preferences abstract we study a negotiation model with a disagreement game between offers and counteroffers when players have different time preferences delay can be pareto efficient thereby violates the presumption of the hicks paradox we show that all equilibria are characterized by the extreme equilibria making unacceptable offers supports extreme equilibria and significantly alters the backward induction technique to find the extreme equilibrium payoffs a player s worst equilibrium payoff is characterized by a minmax problem involving efficient equilibrium payoffs that are above the bargaining frontier which is possible when players have sufficiently different time preferences

striking for a bargain between two completely informed agents this paper models the wage contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide in each period whether or not to strike for the duration of that period we show that there exist subgame perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement although both parties are completely rational and fully informed this has implications for other inefficient phenomena such as tariff wars debt negotiations and wars in general we characterize the set of equilibria show that strikes can occur in real time and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities copyright 1991 by american economic association

valuating payoff streams under unequal discount factors abstract we study repeated prize allocation when the discount factors of the agents are unequal the feasible set of payoffs behaves badly the pareto frontier is everywhere discontinuous and there is an open subset of high discount factors under which the feasible set is totally disconnected

on the role of social norms in a market economy given that the discussion in section 2 focuses on but two potential sources of norms and on only a pair of variables affecting the activities of these sources it may appear premature to attempt to generalize about the supply of netn norms in a market economy however based on the above discussion it is nevertheless quite reasonable to hypothesize that the norms market will not operate in such a way as to ensure the proper supply of netn norms the failures found by economic theory in the economic marketplace and by petp in the political market have their analogue in the norms market that this can be said with some assurance even though the investigation has been so limited is due to the importance of the variables and group activities investigated the specific structural characteristics the high degree of specialization in society and the specific cluster of values those related to individualism examined above and found to be inhibitory to the supply of netn norms are of considerable importance and their negative impact on the norms market cannot readily be altered in the first place these variables are significantly and synergistically related to one another but secondly and more importantly these variables are so closely associated with the market economy itself that short of replacing the market little can be done to diminish the negative effect that these variables have on the supply of netn norms

the validity of environmental benefits transfer further empirical testing this paper provides further empirical evidence of the validity of environmental benefits transfer based on cv studies by expanding the analysis to include control factors which have not been accounted for in previous studies these factors refer to differences in respondent attitudes traditional population characteristics were taken into account but these variables do not explain why respondents from the same socio economic group may still hold different beliefs norms or values and hence have different attitudes and consequently state different wtp amounts the test results are mixed the function transfer approach is valid in one case but is rejected in the 3 other cases investigated in this paper we provide further evidence that in the case of statistically valid benefits transfer the function approach results in a more robust benefits transfer than the unit value approach we also show that the equality of coefficient estimates is a necessary but insufficient condition for valid benefit function transfer and discuss the implications for previous and future validity testing

potential economic benefits from gear restrictions and license limitation in fisheries regulation the economic analysis of various fisheries management tools has been the subject of an enormous economic literature a large portion of which has been produced since the passage of extended fisheries jurisdiction laws in the majority of the countries of the world crutchfield 1961 anderson 1977 pearse 1979 rettig and ginter 1980 clark 1980 clark 1981 anderson 1981 sturgess and meany 1982 beddington and rettig 1984 the general conclusion of this literature is that traditional management techniques such as closed seasons closed areas gear restrictions and total quotas are economically inefficient in that directly or indirectly potential gains are dissipated through increases in costs

international fish wars the strategic roles for fleet licensing and effort subsidies abstract this article examines the problem of noncooperative international fishing by analyzing the strategic rent shifting roles for such well known national management policies as fleet licensing and effort subsidies it is shown that the noncooperative equilibrium in each policy takes the form of a prisoner s dilemma with dissipated rents in the fishery it is also shown that strategic effort subsidies can only lead to incomplete rent dissipation but strategic fleet licensing can lead to complete rent dissipation the models developed in this article may help to provide an explanation for the persistence of large and excessively subsidized national fleets that exploit depleted international fish stocks

the economics of tax amnesties abstract this paper examines some of the economic implications of tax amnesties we present a model where individuals are initially uncertain about the disutility from tax evasion when they file their tax returns if they later learn that they would like to be more honest than they have been an amnesty gives them an opportunity to report additional income we also show that as the probability of an amnesty rises people report less income as a consequence an optimal collection policy requires the government to balance the cost of lost tax revenue against the gains from an amnesty

when fishery rhymes with poverty a first step beyond the old paradigm on poverty in small scale fisheries abstract in this paper we first look retrospectively at the perceptions embraced by academics international agencies and practitioners of the relation between fisheries and poverty in developing countries and we try to identify the underlying paradigms which have structured these perceptions the review reveals how the debate has focused on the economic low income and biological overexploitation aspects of the problem we then revisit these perceptions in the light of the recent conclusions drawn from other sectors and in particular from the new consensus on poverty proposed by the international community incorporation of the recent research on poverty helps to show how socio institutional mechanisms governing people s access to fisheries resources rather than the resources themselves play such a critical role in vulnerability to poverty finally a typology identifying four different categories of intrasectoral exclusion mechanisms is developed and illustrated through empirical studies derived from african and asian fisheries

if homo economicus could choose his own utility function would he want one with a conscience reply in my model of the evolution of honesty 1 i assumed the existence of a signal a blush perhaps extreme values of which served to identify some individuals as being honest with certainty joseph harrington notes that without this assumption honest individuals have difficulty invading a population initially dominated by defectors for readers who do not wish to work through the algebra in his comment the argument is easily summarized in nontechnical terms suppose two honest mutants a and b arrive in an uncountably large population consisting entirely of dishonest persons and suppose that the probability that an honest person exhibits an intense blush is say 0 999 while the corresponding probability for everyone else is only 0 001 when a sees an intense blush on the face of b what will then be his estimate of the probability that b is honest assuming that a knows the laws of elementary probability and corrects for the base rate of honest persons in the population it will be zero when virtually everyone in the population is dishonest even a person with an intense blush will be pegged as dishonest provided that even the smallest fraction of dishonest persons also shows an intense blush with

risk aversion experimental evidence from south african fishing communities we estimate the risk attitudes of a large sample of individuals from various fishing communities along the west coast of south africa female fishers and rights holders are found to be more risk averse than their male counterparts while rights holders are found to be less risk averse relative to subjects without fishing rights risk attitudes are found to be correlated with compliance with fisheries regulations in particular a greater degree of risk aversion translates into a reduction in compliance furthermore in the case of gender female fishers and rights holders are more likely to comply with fisheries regulations

keynes versus wagner public expenditure and national income for three african countries the public expenditure income hypothesis has long been debated in economics following keynes public expenditure is seen as an exogenous factor to be used as a policy instrument to influence growth on the other hand wagner argues that expenditure is an endogenous factor or an outcome not a cause of growth in national income the purpose of this paper is to apply both the granger and holmes hutton statistical procedures to test the income expenditure hypothesis for three african countries ghana kenya and south africa we find that the hypothesis of public expenditure causing national income is not supported by the data for these african countries

short and long term relation between economic development and government spending the role of quality of institutions abstractthis paper tests the wagner s assumption of the one sided directional flow moving from economic growth to public spending considering an international database over the 1996 2012 period by

an intertemporal analysis of the interdependence between risk preference retirement and work rate decisions indivisibilities in consumption investment choice of employment and so forth have been used by others to justify the behavior of the insurance buying gambler unfortunately these theories ignore the market incentives to make the indivisible divisible through leasing or variation in quality as well as individual initiative through borrowing and lending in this paper the same behavior toward risk is explained without resort to indivisibilities or market imperfections using the effect of work rates and retirement decisions on lifetime earning profiles this is done using assumptions normally consistent with risk aversion diminishing marginal utility of consumption and time separable utility

a time domain transfer function model of wagner s law the case of the united kingdom economy the dynamic relationship which is implied by wagner s law is well established in the literature however the methodology which has been applied to investigate this dynamic relationship has tended to avoid a dynamic specification this paper investigates wagner s law employing transfer function methodology in the time domain for the uk over the period 1946 85

the compleat fish wars biological and dynamic interactions abstract in this article we study an example of a fishery in which there are two agents each harvesting two species of fish there are two externalities in the model the dynamic externality studied in levhari and mirman 1980 and the biological externality examined in fischer and mirman 1992 this model allows us to study the interactions between agents in a model in which the species of fish interact we find the unique closed loop nash equilibrium in the context of a differential game and we compare the resulting catch ratios to the results of the earlier papers which allow for only one externality we also study the efficiency of the solution

using taxes to deter illegal fishing in itq systems we study the effects of different tax schemes used in fisheries management in combination with an individual transferable quota system we focus on the effects of taxes on equilibrium quota prices and on violations under the assumption that enforcement to induce compliance is imperfect and costly the use of taxes is motivated by the regulator s need to recover costs for enforcement activities we propose the use of a tax on the price of the processed products based on its impact on violations and the information that is required to implement it we also show that this tax has a double pay off for enforcement because it reduces the demand for illegal fishing and increases revenue for enforcement activities without producing a deadweight loss in the quota market we present an application of our model to the case of the red shrimp fishery in chile in our simulation example a tax of 7 on the price of fish exports could sufficiently reduce harvest demand and generate enough funding to completely eliminate quota violations which in the absence of taxes can be more than 100 of the total allowable catch at the same time this tax could increase the equilibrium quota price by 19

unobserved diversity depletion and irreversibility the importance of subpopulations for management of cod stocks abstract diversity is often associated with resilience but in this model unobserved genetic or behavioral diversity can explain the collapse of supposedly regulated fish stocks such as cod recent studies have shown the existence of separate sub stocks of cod even at a very fine geographical scale we show that modeling a group of distinct stocks as if it were one large stock will tend to over estimate the growth and harvest potential if quotas are based on such over estimates the unobserved stock diversity can explain sudden stock collapses and unexpectedly slow recovery as observed for canadian cod it is a lack of information concerning diversity that leads to irreversibility the differences between the various stocks may be behavioral or genetic but cannot be observed by the fishermen or regulators who believe that there is a gradual decline in one big stock while in fact they are witnessing the successive disappearance of a series of sub stocks

optimal governing instrument operation level and enforcement in natural resource regulation the case of the fishery most regulation studies have used industry output or inputs as the control variable s but these are only indirectly controlled by government action through its choice of governing instrument enforcement procedure and penalty structure and the operational level of each a model is developed which demonstrates how profit maximizing firms will react to these control variables taking into account the benefits extra production and costs possible penalties of noncompliance and the ability to avoid detection of noncompliance the optimal operation level for two sets of control variables is derived and discussed

explaining non compliance in the norwegian coastal cod fishery an application of the multinomial logit establishing motive is central to the analysis of criminal behaviour this article analyses the range of motives for noncompliant behaviour among coastal cod fishermen a multinomial logit model is employed to analyse the reasons that underlie various motives the four motives compared in this study are economic technological and social and motives caused by bureaucracy and legitimacy problems the economic motive is found to be most important for coastal fishermen however the cross sectional data indicate that motives vary with fishing gear vessel length and fishermen s age the results indicate that identifying motives for noncompliant behaviour is not straightforward but is important for reducing the extent of infringements of the regulations fishermen who use gill net seine and long line for example are more often motivated to noncompliance by technical problems and bureaucracy than hand jig fishers the study suggests that in order to prevent noncompliance behaviour the authorities manageme

entry deterrence and overexploitation of the fishery abstract two stackelberg game models open access and restricted entry of a poaching fishery situation are proposed only the long run noncooperative solution of managing resource stocks is assumed feasible the optimal stock under open access for poachers is shown to be lower than under restricted entry and the latter to be lower than under exclusive ownership deterrence is completely successful under open access but is partially successful only under restricted entry the game models considered are shown to be equivalent to a constrained ownership fishery control problem or its surrogate

trust and taxpaying testing the heuristic approach to collective action theory trust is a critical attitude that extends the duty heuristic developed in scholz and pinney 1995 the trust heuristic can provide the basis for a contingent compliance strategy capable of sustaining cooperative solutions to collective action problems of governance if two conditions are met first compliance with laws must be conditional on levels of trust in specific legal arenas second a citizen s trust in government and trust in other citizens willingness to obey the law must reflect the costs and benefits associated with obeying laws hypothesis this article tests the first hypothesis in the tax arena trust in government and in other citizens increase compliance over and above the levels expected from an internalized sense of duty to obey laws and the fear of getting caught by enforcement agencies like the irs method we test the hypotheses with regression analysis of survey and tax return data from a stratified sample of 299 middleand upper income taxpayers using the newlydeveloped two stage conditional maximum likelihood analysis to control for endogeneity we extend this approach to the analysis of multi categorical ordered dependent variables findings both dimensions of trust significantly increase the likelihood of tax compliance even after controlling for duty fear selection bias and potential endogeneity effects