surveys in public sector economics part i public sector production 2 shadow pricing in the public sector peter hammond professor of economics stanford university 3 regulation of public utilities and nationalized industries ingo vogelsang professor of economics boston university 4 economics of publicly provided goods and services paul hare professor of economics heriot watt university part ii distribution and welfare 5 the political economy of fiscal policy daniel ingberman and robert inman respectively assistant professor of public policy and management wharton school university of pennsylvania and professor of finance economics and public management university of pennsylvania 6 policy targetting in a new welfare framework with poverty john beath geoff lewis and david ulph both john beath and geoff lewis are lecturers in economics bristol university david ulph is professor of economics bristol university 7 the structure of income and commodity taxation christopher heady lecturer in economics university college london part iii estimation and computation 8 econometric issues in public sector economics richard blundell director of the institute for fiscal studies 9 general equilibrium computation applied to public sector issues john piggot professor of economics university of sydney with appendix by jon fuller

grading minimum quality standards and the labeling of genetically modified products we relate the labeling of genetically modified gm products to the theory of grading and minimum quality standards the model represents three stages in the supply chain assumes a vertical product differentiation framework allows for the accidental commingling of non gm products and treats regulation as a purity threshold for non gm products we find that a non gm purity level that is too strict leads to the disappearance of the non gm product and that some quality standard benefits farmers indeed the standard that is optimal from the perspective of producers is stricter than what is optimal for consumers and for societal welfare

reversing urban bias in african rice markets evidence from senegal summary urban bias constitutes an important institutional impediment to economic development in poor countries some african governments now recognize that they should invest in agricultural productivity in order to reverse urban bias but often forget the equally important objective of investing in quality tailored to consumers so as to reverse urban bias footprint on food markets we conduct framed field experiments in two major urban markets in senegal and find that the majority of urban consumers are willing to pay quality premiums for local rice suggesting that investment in post harvest rice quality is a priority in the reversal of urban bias 2012 elsevier ltd all rights reserved

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

comparative advantage in demand and the development of rice value chains in west africa summary national rice development strategies in africa are often supply focused and implicitly assume that consumers will readily substitute imported for domestic rice however due to increasing import dependency urban consumer preferences for rice have become biased toward asian export quality standards against which african rice has difficulties to compete anecdotal evidence suggests that this import bias is higher in cities close to the port and remote from the geographical centers of cultural heritage where african rice was domesticated more than 3 000 years ago we purposely select a sample of five west african urban markets which are supplied by both foreign and domestic rice value chains and which are located at varying distances from the nearest ports and centers of cultural heritage and conduct framed field experiments based on auctions to analyze the drivers of urban demand for domestic rice with upgraded quality characteristics we find that west african rice has increasing difficulties competing against imported rice on urban markets the more consumers appreciate characteristics of imported asian rice the closer to the port and the further the geographical and genealogical distance from rice cultural heritage these challenges provide crucial insights into value chain upgrading in policy makers struggle to achieve rice self sufficiency in west africa our findings suggest that the optimal portfolio of investment in value chain upgrading is a function of the targeted end market and its distance from the port and rice cultural heritage the closer the end market is located toward the port the more investment is needed in lifting demand of domestic rice through quality upgrading branding and promotion to enable it to compete against imported rice proximity to centers of cultural heritage on the other hand endows rice value chains with a comparative advantage in demand requiring less investment in demand lifting and leaving more room for supply shifting investments

consumers response to the eu quality policy allowing for heterogeneous preferences abstract using dry cured ham as an anchor product consumers preferences for eu quality certification schemes region of origin and price have been investigated with conjoint analysis in order to achieve this aim a mixed rank ordered logit which allows for the investigation of heterogeneous preferences and their sources has been estimated in particular we have analysed to what extent consumers socio demographic traits affect their price sensitiveness and whether consumers sensory hedonic valuations and attitudes towards ham with a protected designation of origin pdo affect the preferences for specific attributes results show that consumers with a low medium age and income are more price sensitive consumers more inclined sensorially towards the regional specialty with or without pdo are more likely to purchase this product and consumers with a more favourable attitude towards pdo ham are also more prone to purchase cured ham with quality certification findings also suggest that although the pdo scheme attracts a segment of consumers the origin by itself is still a more powerful signal of quality and more specifically the region of origin

oil rents corruption and state stability evidence from panel data regressions abstract we examine the effects of oil rents on corruption and state stability exploiting the exogenous within country variation of a new measure of oil rents for a panel of 30 oil exporting countries during the period 1992 2005 we find that an increase in oil rents significantly increases corruption significantly deteriorates political rights while at the same time leading to a significant improvement in civil liberties we argue that these findings can be explained by the political elite having an incentive to extend civil liberties but reduce political rights in the presence of oil windfalls to evade redistribution and conflict we support our argument documenting that there is a significant effect of oil rents on corruption in countries with a high share of state participation in oil production while no such link exists in countries where state participation in oil production is low

on the deadweight cost of production requirements for geographically differentiated agricultural products this article investigates the welfare effects of alternate producer collusion schemes in a context where collusion is authorized in order to cover fixed costs using a linear equilibrium displacement model we find evidence that when the producer group is allowed to control quota levels an input quota policy entails a smaller absolute deadweight loss than an output quota policy this finding suggests that if producer groups are allowed to resort to production distorting instruments to limit output they will make production choices that are less costly for society than if they had been allowed to directly control output levels copyright 2008 oxford university press

marshallian vs walrasian stability in an experimental market the experiments discussed below are an attempt to examine concepts of stability as found in economic textbooks two concepts of stability which stem from two different concepts of market adjustment seem to have dominated thinking whilst these two concepts are typically called walras stability and marshall stability some controversy exists over the extent to which these two models represent their respective thinking no doubt the current formal statements of the theories reflect an evolution of the ideas through the work of many theorists the terminology is retained for convenience regardless of their origins these two concepts lead to competing hypotheses about the conditions under which market instability will be observed so the subject is a natural one for experimental investigation furthermore since this is the first experimental examination of the stability of equilibria the strategy is to inquire about stability in the context of these two classical models and to avoid the temptation to attempt to extend them or integrate them with more modern theory the old models have not been checked they seem to be an appropriate place to start

on the distribution of education and democracy this paper empirically analyzes the influence of education on democracy by controlling for unobservable heterogeneity and by taking into account the persistency of some of the variables the most novel finding is that an increase in the education attained by the majority of the population is what matters for the implementation and sustainability of democracy rather than the average years of schooling we show this result is robust to issues pertaining omitted variables outliers sample selection or a narrow definition of the variables used to measure democracy

resource intensity institutions and development summary we examine the relationship between resource abundance and several indicators of human welfare consistent with the existing literature on the relationship between resource abundance and economic growth we find that given an initial income level resource intensive countries tend to suffer lower levels of human development while we find only weak support for a direct link between resources and welfare there is an indirect link that operates through institutional quality there are also significant differences in the effects that resources have on different measures of institutional quality these results imply that the resource curse is a more encompassing phenomenon than previously considered and that key differences exist between the effects of different resource types on various aspects of governance and human welfare 2005 elsevier ltd all rights reserved

geographical indications public goods and sustainable development the roles of actors strategies and public policies summary the protection of geographical indications gis is being explored more and more worldwide as a tool for supporting local sustainable development focusing on wine and coffee value chains this paper will set out in what way gi protection schemes can contribute to the provision of public goods and illustrate how this contribution is being threatened by different failures that may occur within both valorization strategies and legal protection policies by examining how private collective and public interventions front these failures this paper will put forward economic arguments supporting a more comprehensive policy approach to ensure gis contribution to sustainable development

the nature of the farm abstract using a model based on a trade off between moral hazard incentives and gains from specialization this paper explains why farming has generally not converted from small family based firms into large factory style corporate firms nature is both seasonal and random and the interplay of these qualities generates moral hazard limits the gains from specialization and causes timing problems between stages of production by identifying conditions in which these forces vary we derive testable predictions about the choice of organization and the extent of farm integration to test these predictions we study the historical development of several agricultural industries and analyze data from a sample of over 1 000 farms in british columbia and louisiana in general seasonality and randomness so limit the benefits of specialization that family farms are optimal but when farmers are successful in mitigating the effects of seasonality and random shocks to output farm organizations gravitate toward fa

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

demographic transition in resource rich countries a blessing or a curse summary this study argues that resource wealth is a key factor for understanding income effects of demographic transition we develop a simple model highlighting how the income effect of increased labor supply may depend on resource rents and provide empirical evidence that support the theoretical predictions using panel data covering the period from 1982 to 2006 for more than 120 countries we find a negative interaction effect between resource wealth and demographic transition on national income moreover the negative interaction effect does not depend on institutional quality and is found also across different samples

on the comparative statics of a competitive industry with inframarginal firms recently economists have begun to develop a theory of the perfectly competitive firm and industry in long run equilibrium in contrast to the traditional model2 in which all prices are parametric this new theory takes explicit recognition of the fact that output price must adjust to exogenous changes in input prices before the industry can be said to be in long run competitive equilibrium the focus of this analysis has been to derive implications of competitive theory which can be tested using data generated by observing individual firms in

strength of protection for geographical indications promotion incentives and welfare effects we address the question of how the strength of protection for geographical indications gis affects the gi industry s promotion incentives equilibrium market outcomes and the distribution of welfare geographical indication producers engage in informative advertising by associating their true quality premium relative to a substitute product with a specific label emphasizing the gi s geographic origin the extent to which the names words of the gi label can be used and or imitated by competing products which depends on the strength of gi protection determines how informative the gi promotion messages can be consumers heterogeneous preferences vis a vis the gi quality premium are modeled in a vertically differentiated framework both the gi industry and the substitute product industry are assumed to be competitive with free entry the model is calibrated and solved for alternative parameter values results show that producers of the gi and of the lower quality substitute good have divergent interests gi producers are better off with full protection whereas the substitute good s producers prefer intermediate levels of protection but they never prefer zero protection because they benefit indirectly if the gi producers incentives to promote are preserved for consumers and aggregate welfare the preferred level of protection depends on the model s parameters with an intermediate level of protection being optimal in many circumstances

institutions and the resource curse countries rich in natural resources constitute both growth losers and growth winners we claim that the main reason for these diverging experiences is differences in the quality of institutions more natural resources push aggregate income down when institutions are grabber friendly while more resources raise income when institutions are producer friendly we test this theory building on sachs and warner s influential works on the resource curse our main hypothesis that institutions are decisive for the resource curse is confirmed our results contrast the claims of sachs and warner that institutions do not play a role

intellectual property rights and the world trade organization retrospect and prospects this paper analyzes the main economic issues of intellectual property rights iprs protection in the context of the world trade organization wto a retrospective view on the establishment of the trips trade related aspects of intellectual property rights agreement a still controversial accomplishment of the uruguay round of trade liberalization is provided the paper reviews the economic rationale for the harmonization of iprs drawing both on economic theory considerations as well as emerging empirical evidence the logic of linking ipr protection and trade in the context of the wto is also re examined some specific attention is devoted to the implications of trips for agricultural and biotechnology innovations the impact that ipr protection can have in promoting growth and development and the relation of iprs with other economic policies is discussed the paper concludes with an analysis of the prospects for more or less iprs related consensus in the current round of wto negotiations

on the economics of labels how their introduction affects the functioning of markets and the welfare of all participants are labels good or bad for consumers and firms the answer may seem straightforward since labels improve information yet economic theory reveals situations where their introduction reduces the welfare of at least some market participants this essay reviews the theoretical literature on labels in order to identify and explain the main reasons that may cause labeling to produce undesirable side effects in contrast to earlier reviews that either concentrate on narrow topics or treat the subject in a more or less informal way we bring together the main results from all the relevant topics by presenting and discussing the assumptions and model building techniques that underpin them the advantage of this approach is that it identifies the origin of the differences between results thus allowing the synthesis of results that sometimes appear even to be contradictory we focus on quality labels and examine the impact of labeling on market structure the side effects of costly certification issues related to the label s trustworthiness the rationale for mandatory vs voluntary labeling the level at which the label s standard is set according to the agency that selects it the political economy of labels that is pro or anti label lobbying lobbying to affect the label s standard and lobbying in favor or against the label s mandatory imposition these topics cover a wide range of applications including genetically modified organism gmos organic produce geographic indicators controlled origin eco labels etc we conclude by identifying topics that require further research

shining a light on the resource curse an empirical analysis of the relationship between natural resources transparency and economic growth summary one of the most common policy prescriptions for overcoming the so called resource curse particularly for extractive industries has been to call for greater transparency and accountability from governments however despite the conceptual attraction of this policy it has never been empirically proven that resource rich countries are actually less transparent than other countries and whether this lack of transparency has had a significant negative effect on economic growth using a relatively new index of transparency that has extensive coverage both across countries and time the results suggest a strong and robust negative causal association running from point resource export revenues to transparency furthermore there is also some evidence that this lack of transparency is associated with a subsequent decrease in economic growth

collective reputation social norms and participation this paper analyzes a repeated games model of collective reputation with imperfect public monitoring and perfect local peer monitoring of efforts even when peer monitoring is local firms may achieve higher profits under collective reputation by decreasing the cost of maintaining customers trust the optimal number of firms that share a common reputation is greater when 1 trades are more frequent and public information is disseminated more rapidly 2 the deviation gain is smaller compared to the quality premium 3 customers information regarding firms quality is more precise or 4 intragroup information about firms quality is more global from a positive perspective we suggest how social norms can influence the reputation of regional products we also offer an efficiency explanation for food scares from a normative point of view in our model protection of geographical indications increases and mandatory traceability decreases welfare and incentives to provide quality without taking into account direct implementation costs copyright 2012 oxford university press

incomplete adoption of a superior innovation we consider a model in which an innovating monopolist of a technologically superior intermediate input must sell this product to final output producers prior research shows that with complete information the monopolist s optimal strategy will lead to complete adoption of this technologically superior innovation in this article we show that when the price of some competitively supplied input used in the final product market is endogenous and is altered by adoption of the innovation then the optimal pricing strategy of the monopolist may lead to incomplete innovation thus the standard result of complete adoption of the superior technology is partly attributable to the partial equilibrium nature of prior models

population size and civil conflict risk is there a causal link does an expansion of the population size expose nation states to a higher risk of suffering from civil conflict obtaining empirical evidence for a causal relationship is difficult due to reverse effects and omitted variable bias this article addresses causality issues by using randomly occurring drought as an instrumental variable to generate exogenous variation in population size for a panel of 37 sub saharan countries over the period 1981 2004 instrumental variable estimates yield that a 5 increase in population size raises the risk of civil conflict by around six percentage points

geographical indications and the competitive provision of quality in agricultural markets the economics of geographical indications gis is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture it is assumed that certification costs are needed for gis to serve as collective credible quality certification devices and production of high quality product is endogenously determined we find that gis can support a competitive provision of quality and lead to clear welfare gains although they fall short of delivering the constrained first best the main beneficiaries are consumers producers may also accrue some benefit if production of the high quality products draws on scarce factors that they own copyright 2008 oxford university press

a model of labeling with horizontal differentiation and cost variability we study optimal disclosure of variety by a multiproduct firm with random costs the prices for labeled varieties are increasing functions of the cost differential and do not reveal which variety is cheaper to produce nondisclosure is most common under moderate uncertainty about costs and not too much idiosyncrasy in valuations and quality asymmetry mandatory disclosure decreases expected welfare when cost variability is large and quality asymmetry is small the cheaper variety tends to be oversupplied undersupplied when disclosure is voluntary mandatory competition among multiproduct firms that source inputs in the same upstream market may not lead to more disclosure

collective marketing arrangements for geographically differentiated agricultural products welfare impacts and policy implications this paper examines the incentive of atomistic agricultural producers within a specific geographical region to differentiate and collectively market products we develop a model that allows us to analyze the market and welfare effects of the main types of real world producer organizations using it to derive economic insights regarding the circumstances under which these organizations will evolve and describing implications of the results obtained in the context of an ongoing debate between the european union and united states as the anticipated fixed costs of development and marketing increase and the anticipated size of the market falls it becomes essential to increase the ability of the producer organization to control supply in order to ensure the coverage of fixed costs whenever a collective organization allows a market with a new product to exist that otherwise would not have existed there is an increase in societal welfare counterintuitively stronger property right protection for producer organizations may be welfare enhancing even after a differentiated product has been developed the reason for this somewhat paradoxical result is that legislation aimed at curtailing the market power of producer organizations may induce large technological distortions