optimal trade policy under oligopoly a calibrated model of the europe japan rivalry in the eec car market this paper was originally presented at the cefi conference on imperfect competition and international trade aix en provence france june 18 19 1987 we wish to thank avinash dixit who gave the initial impetus to this research we are also grateful to alexis jacquemin and paul krugman for valuable discussion and comments we thank also the french commissariat au plan for financial support and the chambre syndicale des constructeurs automobiles csca for gracious assistance

does opportunism pay off in portugal increases in investment expenditures and changes in the composition of spending favouring highly visible items are associated with higher vote percentages for incumbent mayors seeking re election the political payoff to opportunistic spending increased after democracy became well established in the country 2007 elsevier b v all rights reserved

opportunistic politicians and fiscal outcomes the curious case of vorarlberg using a unique set of electoral rules present in the austrian state of vorarlberg we explore the question ofwhether direct election of the mayor affects the size of local governments using difference in differences estimation and propensity score matching we find evidence that direct elections of the mayor are associated with less expenditure on public administration and public personnel and higher expenditure in the visible categories of spending i e transportation infrastructure and economic subsidies to firms and individuals

nexus of fuel consumption car features and car prices evidence from major institutions in ibadan abstract this study examined the nexus of fuel consumption car characteristics and prices in ibadan it also ascertained whether car buyers undervalue fuel savings a sample of 600 car owners drawn from the six major institutions in ibadan was used in addition to the descriptive analysis the hedonic car price function was estimated using ols and iv estimation techniques the result of the iv estimations were preferred and interpreted empirical findings indicated that respondents do not undervalue fuel savings more explicitly 98 8 of the respondents indicated that they would pay additional naira to buy fuel efficient car if the additional naira is less than the present value of extra future cost of fuel for an inefficient car moreover when asked to rank the factors considered important when purchasing a car fuel consumption ranked third the estimated hedonic price model indicated that the impact of fuel consumption on car price was significantly negative implying that the respondents were willing to pay less for a fuel inefficient car moreover the security and luxury car features were found to increase the price of cars the study recommended that advocacy and orientations be carried out by the stakeholders in the car market to deepen users and potential buyers understanding on car price determinants

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

on the welfare effects of anti discrimination regulations in the ec car market abstract cross country price discrimination in an oligopolistic setting is examined in the context of the market for cars in the european community two types of regulation aimed at limiting price discrimination are considered in one constraints are imposed on absolute cross country price differentials in the other constraints are imposed on price ratios the first rule turns out to be uniformly better than the second in a way that we make precise when a country with no domestic producer of cars is introduced it seems that the redistributional effects of antidiscrimination regulation may be more important than any possible gains in efficiency

impacts of renewables and socioeconomic factors on electric vehicle demands panel data studies across 14 countries abstract electric vehicle demands have increased rapidly since 2010 and depend on renewables and socioeconomic factors using panel data from fourteen countries between 2010 and 2015 we study impacts of seven factors in a multiple linear regression model the factors include percentage of renewable energies in electricity generation number of charging stations education level population density gasoline price gdp per capita and urbanization the first four factors have apparent and positive impacts on the demands and the last two factors don t the gasoline price affects the demands for bevs battery electric vehicles more than that for phevs plug in hybrid electric vehicles one percent increase in renewables would lead to approximately 2 6 increase in ev demands based on the results policy implications are discussed

the economic effects of constitutions replicating and extending persson and tabellini persson and tabellini the economic effects of constitutions the mit press cambridge 2003 show that presidential regimes and majoritarian election systems have important economic effects here the number of countries is expanded and more recent data is used in replicating and extending their analyses we find that the effect of presidential regimes vanishes almost entirely with regard to electoral systems the original results are largely confirmed majoritarian as opposed to proportional electoral systems lead to lower government expenditure lower levels of rent seeking but also lower output per worker the institutional details such as the proportion of candidates that are not elected on party lists and district size are particularly important

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

electoral systems and public spending we study the effects of electoral institutions on the size and composition of public expenditure in oecd and latin american countries we emphasize the distinction between purchases of goods and services which are easier to target geographically and transfers which are easier to target across social groups we present a theoretical model in which voters anticipating government policymaking under different electoral systems have an incentive to elect representatives more prone to transfer public good spending in proportional majoritarian systems the model also predicts higher total primary spending in proportional majoritarian systems when the share of transfer spending is high low after dee ning rigorous measures of proportionality to be used in the empirical investigation we e nd considerable support for our predictions

constitutions and economic policy at the rare moments in history when a nation debates constitutional reform the key issues often concern how the reforms might affect economic policy and economic performance for example italy abandoned a system of pure proportional representation where legislators were elected according to the proportions of the popular national vote received by their parties and moved toward including ingredients of plurality rule where legislators are elected in each district according to who receives the highest number of votes key italian political leaders are now considering proposals to introduce elements of presidentialism where the head of government is elected by direct popular vote rather than the current parliamentary regime a common argument in italy was that the electoral reform would help stifle political corruption and reduce the propensity of italian governments to run budget deficits in the 1990s constitutional reforms have been debated and implemented in a number of other countries too for instance new zealand moved away from a pure system of plurality rule in single member districts to a system mixing elements of proportional representation japan also renounced its special form of plurality rule the so called single nontransferable vote in favor of a system that mixes elements of proportional and plurality representation similar proposals have been debated in the united kingdom in latin america questions have been raised as to whether the poor and volatile economic performance of many countries can be traced to their presidential form of government

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

redistributive public employment abstract politicians may use disguised redistributive policies in order to circumvent opposition to explicit tax transfer schemes first we present a theoretical model that formalizes this hypothesis next we provide evidence consistent with the prediction of the model namely that in u s cities politicians use public employment as such a redistributive device we find that city employment is significantly higher in cities where income inequality and ethnic fragmentation are higher

parallel imports challenges from unauthorized distribution channels we examine the problem of parallel imports unauthorized flows of products across countries which compete with authorized distribution channels the traditional economics model of a discriminating monopolist that has different prices for the same good in different markets requires the markets to be separated in some way usually geographically the profits from price discrimination can be threatened by parallel imports that allow consumers in the high priced region some access to the low priced marketplace however as this article shows there is a very real possibility that parallel imports may actually increase profits the basic intuition is that parallel importation becomes another channel for the authentic goods and creates a new product version that allows the manufacturer to price discriminate we propose a two country three stage model to quantitatively study the effects and strategies in the third stage and in the higher priced country where parallel imports have entered we characterize the resulting market segmentation one segment of consumers stays with the authorized version as they place more value on the warranty and services that come with the authorized version another segment switches to parallel imports because a lower price is offered due to lack of country specific features or warranties parallel imports also generate a third and new segment that would not have bought this product before unlike counterfeits that are fabricated by imitators all parallel imports are genuine and sourced from the manufacturer in the lower priced country through authorized dealers therefore the manufacturer s global sales quantity should increase but profit may rise or fall depending on the relative sizes and profitability of the segments a profit maximizing parallel importer should set price and quantity in the second stage after observing the manufacturer s prices in both countries there will be a threshold of across country price gap above which parallel imports would occur in the first stage the manufacturer can anticipate the possible occurrence of a parallel import its price and quantity and its effect on authorized sales in each country to make a coordinated pricing decision to maximize the global supply chain profit under some circumstances the manufacturer should allow parallel imports and under others should prevent them through a stackelberg game we solve for the optimal pricing strategy in each scenario we then find in one extension that when the number of parallel importers increases the optimal authorized price gap should narrow but the prices and quantities of parallel imports may rise or fall in another extension we nd that when the manufacturer has other means such as monitoring dealers differentiating designs and unbundling warranties to contain parallel imports the authorized price gap can widen as a function of the effectiveness of nonpricing controls in summary parallel imports may help the manufacturer to extend the global reach of its product and even boost its global profit if the manufacturer offers a discount version through its authorized dealers it is running a high risk of confusing customers and tarnishing brand images parallel imports may cause similar concerns for the manufacturer but unauthorized dealers are perceived as further removed from the manufacturer therefore there is less risk of confusing consumers when parallel imports are channeled through unauthorized dealers furthermore they are more nimble in diverting the product whenever their transshipment and marketing costs are small enough not to offset the authorized price gap and the valuation discount this may explain why some manufacturers fiercely fight parallel imports while others knowingly use this alternative channel

the prices of classical recorded music a hedonic approach abstract this paper is an empirical investigation into factors that are responsible for the differences in prices of classical music compact discs though primarily a statistical exercise the current work has implications for understanding the structure conduct and performance experienced by the classical music record industry the major changes experienced by this industry are highlighted we focus on the rapid technological change in recording technologies format changes the product heterogeneity that results from the simultaneous existence of incumbent and entering models with various technological vintages and the behaviour of firms of different kinds using an as yet untapped french data source for the period 1989 1994 the results of hedonic regressions indicate that new vintages are priced at a premium reflecting higher recording costs owing to contractual arrangements with superstars this premium is even higher for recordings made by majors the price markups enjoyed by major firms have declined over time because of increasing competitive pressure independents and majors exhibit a distinct behaviour as to the location of classical music cd s recordings in quality space the results favour the hypothesis that independents locate their recordings in empty market niches the nominal quality adjusted prices for independent firms cds declined at an annual average rate twice that of the majors

do constitutions matter evidence from a natural experiment at the municipality level this paper asks if it does matter for taxes and government spending whether the mayor is elected and recalled by direct election or by the municipal council it thus contributes to the economic literature on the impact of constitutions on economic outcomes the effects are identified based on reforms of the municipal constitutions that were exogenous from the point of view of the municipalities in content and timing each year quasi randomly selected groups of municipalities introduced the new constitution this setup helps overcome endogeneity and identification issues that are common to many studies in the field using country level data using a new panel dataset of the 686 municipalities in three german states this paper shows that direct mayoral election and recall through referendum only as opposed to election and recall through the municipal council reduce tax rates and increases spending on government employees

the political economy of health services provision in brazil abstractwe examine the impact of local politics and voter preferences on the allocation of publicly subsidized the unified and decentralized health care system sus health services across 4 338 counties in brazil sus clinics doctors and nurses per capita are higher in counties with a higher share of uninsured in the population and with higher per capita incomes as is consistent with a probabilistic voting model political participation i e the fraction of the poor who vote and the political power of the mayor his vote share in the last election are associated with more visible health inputs namely clinics and consultation rooms but not with more doctors and nurses

electoral manipulation via voter friendly spending theory and evidence abstract we present a model of the political budget cycle in which incumbents try to influence voters by changing the composition of government spending rather than overall spending or revenues rational voters may support an incumbent who targets them with spending before the election even though such spending may be due to opportunistic manipulation because it may also reflect sincere preference of the incumbent for types of spending voters favor classifying expenditures into those which are likely targeted to voters and those that are not we provide evidence supporting our model in data on local public finances for all colombian municipalities our findings indicate both a pre electoral increase in targeted expenditures combined with a contraction of other types of expenditure and a voter response to targeting

overlapping political budget cycles we advance the literature on political budget cycles by testing for cycles in expenditures for elections to the legislative and the executive branches using municipal data we identify cycles independently for the two branches evaluate the effects of overlaps and account for general year effects we find sizable effects on expenditures before legislative elections and even larger effects before joint elections to the legislature and the office of mayor in the case of coincident elections we show that it is important whether the incumbent chief executive seeks reelection to account for the potential endogeneity of that decision we apply an iv approach using age and pension eligibility rules

opportunistic political cycles test in a young democracy setting this paper tests the theory of opportunistic cycles in a decade old democracy russia finds strong evidence of cycles and provides an explanation for why previous literature often found weaker evidence using regional monthly panel data we find that 1 the budget cycle is sizable and short lived public spending shifts toward direct monetary transfers to voters 2 the magnitude of the cycle decreases with democracy government transparency media freedom voter awareness and over time and 3 preelectoral manipulation increases incumbents chances for reelection the short length of the cycle explains underestimation of its size by previous literature because of low frequency data used in previous studies

how do electoral systems affect fiscal policy evidence from cantonal parliaments 1890 2000 using a new data set on swiss cantons since 1890 we analyze how the adoption of proportional representation affects fiscal policy in line with economic theory we show that proportional systems shift spending toward broad goods like education and welfare benefits but decrease spending on geographically targetable goods like roads we find little evidence that proportional representation increases the overall size of government an analysis of the underlying theoretical mechanisms reveals that proportional representation increases electoral turnout left wing representation and political fragmentation these changes in political representation explain a substantial share of the rise in education spending but a small share of the rise in welfare spending or the decline in road expenditures jel h4 h11 i38

politicians bureaucrats and targeted redistribution abstract the paper argues that for political reasons elected politicians are more likely to be engaged in targeted redistribution than appointed bureaucrats it uses the example of patronage jobs in the u s local governments to provide empirical support for this claim it shows that the number of public employees is higher for elected chief executives this difference is stronger in public services with bigger private public wage differential and it increases during election years it also finds that the number of public employees increases with the age of bureaucrats while there is no such relationship in the case of politicians which is consistent with younger bureaucrats having stronger career concerns