are environmental taxes a free lunch issues in modelling the macroeconomic effects of carbon taxes applied analysis of output and employment effects from revenue neutral environmental taxation depends critically on how the supply side of the economy is modelled despite the long history of theoretical and computable general equilibrium supply side models the empirical basis of much of this work has been quite weak until recently however most econometric attempts to capture factor substitution effects have not been based on theoretically consistent structures this paper examines the methodological issues that underlie these problems and compares the results of imposing environmental taxes in two different econometric modelling structures the implications of theories of endogenous technical progress on the simulation properties of such models are discussed and a simple empirically based model that embodies some of these features is presented

from shadow to green linking environmental fiscal reforms and the informal economy in the past few decades many papers have analysed in some depth different environmental tax reforms and the double dividend hypothesis i e the possibility of improving not only the environment but also the economy through the reduction of distortions in the tax system recently more stress has been placed on testing empirically what effects a reduction in labour taxes may have on unemployment when accompanied by a carbon or other environmental tax however such studies have not modelled the effects of the presence of a shadow economy even though informal markets account for a significant and growing part of gdp in many developed economies this paper analyses this link using an applied general equilibrium model for the case of spain which has one of the highest unemployment rates in the world and one of the biggest informal economies of any wealthy country we conclude that our analysis strengthens the case for an environmental tax reform in spain if revenues from a co2 tax are recycled via a labour tax reduction

efficient environmental taxation under worker firm bargaining we study an economy with free firm entry and unemployment due to firm worker bargaining over each firm s surplus and where firms cause pollution that can be reduced by initial investments an uncompensated increase in the pollution tax reduces pollution but increases unemployment implying a tradeoff between the two when tax revenues are used to subsidize either firms hiring or investments employment may also increase creating a double dividend from the pollution tax a pollution tax increase used to subsidize current employment is always less effective than a hiring subsidy and is totally ineffective when subsidies equal pollution tax revenues for each individual firm we show that the hypothetical pollution tax implementing the first best solution exceeds the pigouvian tax the second best tax exceeds this first best tax when we have a double dividend and is below it when we do not

compact cities and economic productivity in mexico this paper examines the contingent nature of agglomeration economies existing empirical evidence that compact cities are more productive is mostly from countries and regions with highly productive

towards a re interpretation of the economics of feasible socialism this paper re examines the debate on whether socialism is feasible from the perspective of the literature on the division of labour and organisational forms the central argument is twofold first each of the major protagonists in the debate provide a partial explanation as to when market socialism planned socialism and participatory socialism are feasible second the different perspectives on when socialism is feasible can be reconciled through seeing the arguments in terms of specific techno economic paradigms which are underpinned by their own concepts of the division of labour and efficiency attributes the authors show that theories on the economics of socialism reflect different techno economic paradigms and that when and whether the various views on socialism are appropriate depend on the prevailing external conditions economic growth path and mode of institutional arrangement copyright 2004 oxford university press

visible seeds of socialism and metamorphoses of capitalism socialism after rosdolsky roman rosdolsky suggests a method to deal with the transition towards socialism that integrates three issues 1 the identification of dynamic features of capitalism 2 the systematisation of metamorphoses of capitalism 3 the evaluation of how these metamorphoses reshape the elaboration of alternatives to capitalism this evaluation is a precondition for the visualisation within the complex dynamics of capitalism of seeds of a new society institutions born out of political struggles and of emancipatory features of key social processes these institutions reshape the nature of the metamorphoses of capitalism and the possibility of establishing socialism and democracy

the governance structure of the japanese financial keiretsu abstract we rationalize the cross holdings of debt and equity within the japanese keiretsu as a contingent governance mechanism through which internal discipline is sustained over time the reciprocal allocation of control rights supports cooperation and mutual monitoring among managers through a coalition enforced threat of removal from control in financial distress this threat is less effective and the governance mode shifts to hierarchical enforcement under main bank leadership the model is consistent with the capital structure the distribution of claims the extent of intragroup trading and patterns of investor intervention within the groups

can a carbon permit system reduce spanish unemployment this paper analyses the impact of carbon policy on unemployment in spain and whether recycling the public revenues earned from permit auctions can alleviate this problem while spain s deviation from the european union s intermediate emission goals is more serious than most other member countries unemployment in spain is also well above average for the european union we use a computable general equilibrium model that includes unemployment in the markets for unskilled and skilled labour we find that introducing carbon permits does not aggravate spanish unemployment in fact if supplied with revenue recycling schemes unemployment rates may actually fall contrary to other european studies we find that the best option is to reduce payroll taxes on relatively skilled types of labour this reform is successful in both increasing labour demand and dampening the supply response to rising wages however while all of the recycling schemes generate dividends in terms of aggregate welfare none entirely offsets the abatement costs

us metropolitan spatial structure and labour accessibility metropolitan areas vary widely in employment distribution and labour accessibility comparing four us metropolitan areas atlanta boston phoenix and washington dc it is found that atlanta and washington dc suffer from low labour accessibility compared with boston and phoenix moreover large suburban employment centres in atlanta and washington dc suffer from even lower accessibility than other employment centres within the same metropolitan areas or their counterparts in boston and phoenix their low labour accessibility is mainly explained by slower commuting speeds even though their residential and employment densities are modest congestion in these employment centres is severe enough to undermine accessibility the results raise questions about the effectiveness of creating large sub centres in metropolitan areas particularly creating auto oriented edge city style employment centres at highway nodes

environmental taxation and unemployment some evidence on the double dividend hypothesis in europe abstract the employment double dividend hypothesis suggests that an appropriately designed fiscal reform in which emission charges are used to subsidize employers social security contributions may realize at least two relevant policy goals a better quality of the environment and at the same time an increase in employment levels this paper uses a newly developed econometric general equilibrium model for the european union as well as for each member country and presents simulation results up to the year 2010 of the effects of a european carbon tax the revenues from which are recycled to reduce employers social security contributions the results show that recycling carbon tax revenues may provide an employment double dividend only in the short run

environmental policy public finance and the labour market in a second best world abstract environmental and tax policies and the optimal provision of clean and dirty public goods are analysed within the context of a second best framework of optimal taxation households consume both clean and dirty commodities degradation of the natural environment occurs due to the consumption of dirty private and public goods but can be offset when the government engages in abatement activities increased environmental concern implies a higher dirt tax a lower tax on labour less employment more public abatement and a cleaner environment if the elasticity of substitution between private consumption commodities and leisure is large and that between clean and dirty goods is small public consumption may expand while private consumption contracts otherwise public consumption falls

the transition according to cambridge mass this paper reviews the nber s the transition in eastern europe this book s 18 essays examine privatization stabilization fiscal policies the nascent private sector bankruptcy foreign trade and investment etc individual country performance occupies six studies these essays which are of high quality provide a cross section of the literature on transition however the book s stronger conclusions are not supported by strong evidence two conclusions unemphasized by contributors emerge expectations which reflect the theories used to design standard reforms are often unfulfilled during reforms a plausible explanation for the misplaced expectations is the ahistorical approach of those theories

toward an economic model of the japanese firm i owe a great deal to professor moses abramovitz who suggested that i write this article i appreciate his constant encouragement and guidance which aided me throughout its preparation i am also indebted to three anonymous referees of the journal and to professors ryutaro komiya and michael riordan for their critical comments and helpful suggestions needless to say i am solely responsible for the views expressed in this paper

efficient urbanisation economic performance and the shape of the metropolis the influences of urban form and transport infrastructure on economic performance show up in several contemporary policy debates notably sprawl versus compact city and in the developing world the future of mega cities this paper probes these relationships using two scales of analysis at the macro scale an econometric analysis using data across 47 us metropolitan areas reveals that employment densities and urban primacy are positively associated with worker productivity suggesting the presence of agglomeration economies congested freeways are shown to be a consequence of strong economic performance an intrametropolitan analysis using data on sub districts of the san francisco bay area generally reinforces the findings of the macro scale analysis in the bay area labour productivity appears to increase with size of labour marketshed and high accessibility between residences and firms higher employment density and well functioning infrastructure also contribute positively to economic performance

pollution taxation and revenue recycling under monopoly unions a model where a given number of firms determine their pollution reducing production technologies upon establishment and workers form monopoly unions is used to study the possibility of double dividends i e simultaneous reductions in pollution and increases in employment when the pollution tax is increased and tax revenues recycled in alternative ways in all cases pollution is reduced when output is subsidized the effect of a pollution tax increase on employment is always neutral when employment and investments are subsidized employment increases when investments are respectively relatively insensitive and sensitive to pollution taxes of the three subsidy instruments the employment subsidy is always the most and the investment subsidy the least efficient solution

size sprawl speed and the efficiency of cities the efficiency of cities defined here as labour productivity adjusted for differences in industry mix is hypothesised to be a function of the effective size of the labour market of cities defined as the average number of jobs available in less than t minutes to workers in the city this hypothesis is verified on a sample of 23 french cities this effective size of the labour market is further explained by three factors the size of the city the average potential job home distance sprawl and the average speed at which journey to work takes place the same sample of 23 cities is used to determine the elasticities of the effective size of the labour market with respect to each of these three factors

environmental taxation employment and public spending in developing countries this paper investigates the consequences of environmental tax reforms for unemployment and welfare in the case of developing countries with a large informal sector rural urban migration and three different assumptions about public spending 1 as part of a revenue neutral policy 2 fixed and 3 varying endogenously under the indexation of unemployment benefits and informal sector income that give rise to a double dividend a lower level of public spending is associated with a smaller negative impact on the after tax income of households and a higher increase in employment these policies however still lead to a reduction in social welfare even more so in the case of endogenous public spending although it is associated with a higher increase in employment and a smaller reduction in private sector incomes the model implies that complementary policy in terms of lower public spending is unlikely to be socially acceptable and does not support the case for a green tax reforms in developing countries

the economics calculation debate lessons for socialists this paper summarizes the standard account of the economic calculation debate the modern austrian reinterpretation of the debate based on the centrality of tacit knowledge and discovery and a neglected third strand in the historical debate dobb s insistence on the uncertainty associated with atomistic decision making and the need for ex ante planning it then draws some lessons for socialists from the debate and considers a possible market socialist response to the modern austrian challenge the paper ends by outlining a model of participatory planning that incorporates both the modern austrians insight into the importance of tacit knowledge and dobb s insistence on ex ante coordination c 1996 academic press limited copyright 1996 by oxford university press

environmental policy tax incidence and the cost of public funds this paper studies under what conditions a double dividend may occur in the sense that both environmental quality and employment rise a simple static general equilibrium model is employed in which tax policy faces the dual task of internalising a negative environmental externality and raising revenue to finance public consumption the model features a clearing labour market with both labour demand and supply and a fixed factor of production e g capital hence we can study tax incidence and its effect on employment environmental quality and the marginal cost of public funds it is shown for the case of an upward sloping labour supply curve and less than full tax shifting by employers that a shift towards greener preferences cannot yield a double dividend even if the fixed factor is important however if labour supply curve bends backwards more environmental concern confers a double dividend

hayek and socialism friedrich a hayek was a life long opponent of socialism three of his contributions are surveyed and placed within historical context his debates in the 1930s with the market socialists his political critique of socialism in the road to serfdom and his evolutionary arguments against rationalist constructivists recent discussions that use the economics of information to analyze the prospects for socialism are also reviewed it is argued that theorists working in the economics of information have not recognized just how far hayek s conceptualization of the appropriate theoretical constructs for economics deviates from those of mainstream economists as such they have misunderstood what may constitute an independent set of arguments against socialism

perfect competition and the creativity of the market from the perspective of the walrasian general equilibrium model entrepreneurial and opportunistic behavior seems foreign can the model be refashioned so that it can accommodate such behavior many would say no but we argue the contrary indeed we present a reformulation of the model that serves as a gateway to rather than a detour from such contemporary issues as innovation and incentives the trick is to reexamine what perfect competition means starting with an historical summary of general equilibrium we sketch an image of the perfect competitor as an active market opportunist seeking out profit potentials wherever he can

double dividend with involuntary unemployment efficiency and intergenerational equity this paper analyzes the double dividend and distributional issues within an overlapping generations model framework with involuntary unemployment we characterize the necessary conditions needed to obtain a double dividend when the revenue of the environmental tax is recycled by a variation of the labor tax rate we show that an employment dividend may occur without any efficiency dividend and that the young generation is not always harmed by the fiscal reform even without any intergenerational transfers therefore three dividends environmental efficiency and intergenerational equity can occur simultaneously

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

hayek samuelson and the logic of the mixed economy abstract in 1980 friedrich hayek wrote to paul samuelson complaining about the role that economics had played in discrediting the thesis of hayek s the road to serfdom in the 11th edition of economics samuelson had written that each step away from the market system and towards the social reform of the welfare state is inevitably a journey that must end in a totalitarian state given the apparent prevalence of this reading of hayek s thesis we assess the dispute over hayek s inevitability thesis and whether hayek s complaints were justified

credit markets and the control of capital traditional discussions of the role of capital markets have identified a number of distinct functions which they perforrn they allocate scarce capital among competing users and uses l and they provide signals to guide managers in making their investment decisions 2 in this lecture i wish to focus on a rather different function of the capital market what i shall refer to as the control of capital 3 conventional theory treats the typical firrn in an anthropomorphic manner it acts as a single rational individual doing what it is supposed to be doing maximizing stock market value that may have been well and good in those nostalgic bygone days of small firrns each run tightly by their owners who were single mindedly pursuing their lust for wealth but today a majority of production occurs in large corporations in which no shareholder owns more than a small fraction of the shares in which the separation of ownership and control that frank knight was so concerned with in his writings some sixty five years ago has become a reality those

environmental policy and the equilibrium rate of unemployment abstract this paper integrates environmental policy instruments with the theory of equilibrium unemployment we investigate the question of whether a low equilibrium rate of unemployment and a high quality of the environment are complementary policy goals or must be traded off it turns out that an interval exists for a tax on emissions where the two goals are indeed complementary the tax stimulates the emergence of an abatement sector which provides pollution control and vacancies for the job seekers for constrained efficiency the policy maker operates five instruments to internalize the environmental and the search externalities a tax on emissions employment subsidies and recruiting allowances for the polluting industries are sufficient to implement the first best the optimal emission tax is an increasing function of the workers bargaining strength for labor markets where workers have a strong bargaining position the optimal pollution tax may easily exceed the pigouvian tax

fiscal increasing returns hysteresis real wages and unemployment european unemployment is widely regarded as a problem of excessive real wages this view as it is usually expressed carries the disturbing implication that there is a sharp conflict between the interests of those currently employed and the unemployed because it suggests that increases in employment will require reductions in the real wages of those currently employed the first part of this paper shows that increases in employment in europe are likely to be associated with rising real take home pay for workers because of fiscal increasing returns increases in employment and output will make possible reductions in taxes sufficiently large to offset any effects of diminishing returns to labor the second part of the paper considers alternative explanations for the failure of nominal wages to adjust so as to restore full employment and their implications for the efficacy of fiscal policies it concludes that under a variety of plausible conditions tax cuts would succeed in stimulating employment this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

markets and firms transaction costs versus strategic innovation abstract this paper takes the view that the firm is a way of organizing learning and a source of capabilities for innovative moves this requires seeing the firm s problem as one not only of forming appropriate internal organizing structures but also of competing in an environment where new problems regularly emerge as a result of strategic outcompeting moves by rivals market and firm are shown to interact rather than being independent alternatives this altered perspective is given sharper definition by comparing and contrasting it with the results of transactions cost analysis the newer capabilities approach to the firm and the game theoretic literature on coordination and cooperation

urban governance competition and welfare the market mechanism of spatial resource allocation is examined in a system of cities where social welfare depends on city size the competitive dynamics of the system is a product of the interplay between people s individual exit type choices migration and their collective voice type choices urban governance it is shown that the use of efficiency enhancing measures of urban governance depends on the pressure of exit a necessary condition for dynamic efficiency is that the market equilibrium of migration is non stable which sounds somewhat paradoxical dynamic efficiency is more likely to emerge between initially small cities in which agglomeration economies dominate than between initially large cities in which agglomeration diseconomies dominate the incentives for proper urban governance are somewhat ambiguous in the most relevant case where cities are of asymmetrical size it is therefore important to strengthen the incentives by means of national urban policy

economic perspectives on privatization despite being one of the most fundamental issues in political economy the question of the appropriate boundary between public and private enterprise received relatively little attention in mainstream economic analysis until quite recently in the 1980s however programs of ownership reform were started in many developed and developing countries dramatic though some of these policies have been they are likely to be overshadowed in the 1990s by even greater privatization in the reforming socialist economies the opening sections of this paper are organized around three broad and interrelated questions how does ownership matter for the efficiency of enterprise performance what is the role for privatization in financing public debts and deficits what are the distributional and political implications of privatization finally we examine privatization in practice in three countries britain chile and poland

redefining the role of the state an interview with introduction by brian snowdon professor joseph stiglitz is without question one of the world s leading economists in his extensive research he has made seminal contributions to the analysis of the economic consequences of incomplete information and uncertainty this work has greatly enhanced economists understanding of the welfare properties of markets and the sources of market failure his research has also contributed to the development of better microeconomic foundations for keynesian macroeconomic models most recently professor stiglitz has been heavily involved in controversial public policy debates relating to the east asian crisis problems of transition from communism to capitalism the limitations of the washington consensus and globalisation and development a common theme in all of these debates relates to the role of government and legitimate borders of the state in both developed and developing economies in this article interview professor stiglitz gives his views on these and several other important global issues

is capitalism necessary a critique of the neoclassical economics of organization abstract in recent years neoclassical economists have offered a theory of the capitalist firm which implies that the corporation is uniquely adapted to the complexities of the modern industrial economy hence it is argued capitalism is necessary to efficiency this paper designs a non capitalist firm that satisfies all the criteria for efficiency unumerated by the neoclassical institutional economists the design suggests that by separating capitalism from the capital market advocates of non capitalist market systems need not discard the capital market as an instrument of economic control

green policies and public finance in a small open economy we explore the effects of greener preferences for the public finances employment and the domestic capital stock in a second best framework we find that greener preferences typically result in capital flight also employment declines despite the factor substitution that is induced by a lower tax on labour and a higher tax on natural resources if the uncompensated wage elasticity of labour supply is positive private utility declines public consumption in contrast may rise if most of the improvement in environmental quality occurs through a lower level rather than a cleaner composition of economic activity however if the labour supply curve bends backwards private utility rises while public consumption falls i introduction the deterioration of the natural environment constitutes one of the major challenges facing public policy today business groups are concerned that environmental protection induces both capital flight and major losses in private income environmental groups in contrast maintain that a more ambitious environmental policy may not impose large costs in particular environmental taxation may be attractive especially for the high tax countries of western and northern europe in these countries the

on the workability of market socialism contrary to the claim of andrei shleifer and robert w vishny 1994 it is conceivable under market socialism to take firms out of the orbit of state control and that a less narrow theory of the state than theirs allows the possibility of democratic socialism mitigating problems of economic inefficiency better than capitalism

involuntary unemployment and environmental policy the double dividend hypothesis an environmental tax reform might bring about gains over and above improved environmental quality in particular if tax revenues from environmental taxes are used to reduce the tax on wage income positive employment effects can result in second best economies an efficiency wage model is used to analyze the impact of an ecological tax reform on involuntary unemployment the government controls emissions by selling emission permits employment of labor and wages are determined endogenously conditions are identified under which an environmental tax reform reduces unemployment and increases welfare

increasing carbon and material productivity through environmental tax reform abstract environmental tax reform etr a shift in taxation towards environmental taxes has been implemented on a small scale in a number of european countries this paper first gives a short review of the literature about etr an appendix briefly describes the model used for a modelling exercise to explore through scenarios with low and high international energy prices the implications of a large scale etr in the european union sufficient to reach the eu s emission reduction targets for 2020 the paper then reports the results of the exercise the etr results in increased carbon and materials but reduced labour productivity with the emission reductions distributed across all sectors as a reduction in the demand for all fossil fuels there are also small gdp increases for most but not all eu countries for all the scenarios and for the eu as a whole both the environmental and macroeconomic outcomes are better with low than with high energy prices because the former both increases the scale of the etr required to reach the targets and reduces the outflow of foreign exchange to pay for energy imports etr emerges from the exercise as an attractive and cost effective policy for environmental improvement

the contractual nature of the firm for their helpful comments i am grateful to armen a alchian yoram barzel keith leffler john s mcgee and dean worcester 1 ronald h coase the nature of the firm 4 economica 386 1937 the paper however was written several years earlier see note 3 infra 2 the social sciences citation index provides the following information breaking down the period of 1966 80 into three five year periods the total citations of coase s firm paper for each subperiod are 1966 70 17 citations 1971 75 47 citations and 1976 80 105 citations

firm organization industrial structure and technological innovation abstract the formal and informal structures of firms and their external linkages have an important bearing on the rate and direction of innovation this paper explores the properties of different types of firms with respect to the generation of new technology various archetypes are recognized and an effort is made to match organization structure to the type of innovation the framework is relevant to technology and competition policy as it broadens the framework economists use to identify environments that assist innovation

new market socialism a case for rejuvenation or inspired alchemy the aim of this paper is to examine the relative merits and drawbacks of two recent models of market socialism proposed by bardhan and roemer this is done first by putting these models into the perspective of the history of economic thought thus after presenting the basic elements of the early lange model as well as the austrian and new information economics critiques the necessary comparisons and contrasts are made to see what new light these new models bring into this debate in addition the internal consistency and coherence of these models is checked in terms of their own proclaimed goals last a more radical methodological critique is provided copyright 2003 oxford university press

market socialism a case for rejuvenation in this paper we will outline a feasible economic mechanism of competitive socialism our claim is that competitive markets are necessary to achieve an efficient and vigorous economy but that full scale private ownership is not necessary for the successful operation of competition and markets contrary to popular impression this claim has not yet been disproved by either history or economic theory it is the failure of both the political right and the left to disentangle the concepts of private ownership and the competitive market that has led to the premature obituaries for socialism in the second section we look at the question of the soft budget constraint as an agency problem under market socialism we then propose two variants of a bank centric system of insider monitoring as a viable solution to the agency problem the next section discusses the essential problem of political accountability and the difficulty of credible pre commitment in avoiding the soft budget constraint problem and suggests ways of minimizing this problem in our proposed system we then conclude by addressing some of the other standard objections to a proposal for market socialism

on the double dividend under imperfect competition we investigate whether and under which conditions a revenue neutral environmental tax reform may yield an employment double dividend i e an improvement of environmental quality and an increase in aggregate employment using a model with two market imperfections a rigid real wage and imperfect competition in one industry we show that an employment dividend is plausibly obtained however for countries where labor taxes are high and households spend a large share of their income in favor of environmentally harmful consumption goods a double dividend can nevertheless not be obtained for under these conditions environmental quality deteriorates

optimal unemployment insurance with monitoring and sanctions this article analyses the design of optimal unemployment insurance in a search equilibrium framework where search effort among the unemployed is not perfectly observable we examine to what extent the optimal policy involves monitoring of search effort and benefit sanctions if observed search is deemed insufficient we find that introducing monitoring and sanctions represents a welfare improvement for reasonable estimates of monitoring costs this conclusion holds both relative to a system featuring indefinite payments of benefits and a system with a time limit on unemployment benefit receipt

alleviating unemployment the case for green tax reforms abstract it has been argued recently that imposing taxes on pollution produces additional tax revenues which can be used to replace labour taxes and thus reap a double dividend in the form of improving environmental quality and alleviating unemployment this paper analyses the employment effects of revenue neutral green tax reforms by focusing on the revenue recycling effect our model contains three features which are important when looking at the employment effects of green tax reforms first there is unemployment in equilibrium second wages are determined endogenously third various institutional arrangements for taxing unemployment benefits for the price indexation of unemployment benefits and the personal tax exemption are considered it is shown that these institutional arrangements are crucial for the effectiveness of green tax reforms a revenue neutral green tax reform will boost employment if unemployment benefits are nominally fixed and taxed at a lower rate than labour income employment actually falls if unemployment benefits are price indexed and taxed at the same rate a revenue neutral green tax reform which increases the personal tax credit will never increase employment

tax reform structural unemployment and the environment the effects of environmental tax reform i e using the proceeds of a higher energy tax rate to lower the labour tax rate on wage formation employment and environmental quality are analysed in the context of a small open economy with structural unemployment caused by hiring costs we find that such a reform may boost employment if it shifts the tax burden away from workers towards those without employment in the formal sector environmental tax reform succeeds in shifting the tax burden away from workers in the formal sector if higher energy taxes reduce earnings in the informal sector by reducing labour productivity

climate change policy s interactions with the tax system abstract this paper presents a range of insights from recent literature on how climate change policies and other environmental policies interact with the fiscal system it explores four issues associated with fiscal interactions first it examines how these interactions influence the prospects for a double dividend both an environmental improvement and a reduction in the costs of the tax system second it analyzes how the use of revenues from a carbon tax or from a cap and trade system involving auctioned emissions allowances influences these policies economic costs third it addresses the question whether carbon taxes or cap and trade programs represent more efficient sources of government revenue than other more traditional revenue sources such as income sales or payroll taxes finally it analyzes how fiscal interactions affect the choice between co 2 emissions pricing instruments carbon taxes and cap and trade and other climate policy instruments

a proposal for using incentive precommitments in public enterprise funding abstract among the central problems of less developed countries ldcs is the poor performance of their public enterprises pes and the seemingly limited ability of governments and other agencies to improve this performance this paper proposes that project agencies be induced as a part of the initial financing of pes to undertake specific types of precommitments a precommitment to liquidate the project if its ex post performance falls below some threshold level and a precommitment to link a non negligible part of employee compensation to actual performance our proposal is not guaranteed to improve pe performance because there are no perfect solutions to what is inherently a politically difficult problem nevertheless we argue that as long as public enterprises exist independent of whether this is a good idea or not a precommitment to use performance based incentives is likely to improve their performance we discuss the primary sources of pe losses compare their probable magnitudes and explain how various precommitments are likely to ameliorate such losses our proposal is aimed at stimulating more thought on this subject and is addressed to a broad audience

the revenge of homo economicus contested exchange and the revival of political economy recent developments in microeconomic theory have shown that the self interested behavior underlying neoclassical theory is artificially truncated it depicts a charmingly victorian but utopian world in which conflicts abound but a handshake is a handshake but a handshake is not always a handshake studies of principal agent analysis the economics of information radical political economy mechanism design and transactions cost economics have all focused on the difficulties involved in policing and enforcing the actual process of market exchange abandoning the victorian world of neoclassical theory will redirect economists to an older conception of their profession what once was called political economy by taking optimizing more seriously post walrasian economics has inspired a revolution in economic thought fostering both new theoretical departures and alternative conceptions of the capitalist economy we will offer our own interpretation of this literature focusing on the widely recognized fact that the terms arising from exchange are not generally enforceable at zero cost to the exchanging parties where some aspect of the good or service supplied is both valuable to the buyer and costly to provide the absence of third party enforcement of claims gives rise to endogenous enforcement strategies we refer to this relationship as a contested exchange because unlike the transactions of walrasian economics the benefit the parties derive from the transaction depends on their own capacities to enforce competing claims

taxation unemployment and growth dynamic welfare effects of green policies abstract this paper analyzes the effects of environmental tax reforms on a small open economy the labor market is characterized by union wage setting the carbon tax acts as an implicit tariff which gives rise to terms of trade gains the terms of trade effect together with the union wage setting leads to a positive relationship between the capital labor ratio and net foreign wealth in the short run the disinvestments in real and financial capital give temporary room for higher consumption and instantaneous utility the long run effect on instantaneous utility is more uncertain a strong double dividend may exist

the politics of market socialism the debate over market socialism has ignored the importance of the assumptions about the objectives of politicians in determining resource allocation theory and evidence suggest that totalitarian socialism does not lead to efficient resource allocation because dictators do not maximize social welfare but democratic governments have political objectives different from social welfare as well the authors argue that because these governments command greater resources have more control rights under socialism democratic socialism even if it could exist is a less efficient system than democratic capitalism thus the political case against market socialism is even stronger than the economic case

consequences of environmental tax reform for involuntary unemployment and welfare we investigate the welfare effects of environmental tax reform i e raising environmental taxes and using the proceeds to reduce distortionary taxes on labour the framework of analysis is a small open economy with involuntary unemployment due to a rigid consumer wage environmental tax reform boosts not only environmental quality but also employment if substitution between labour and resources is easy the production share of the fixed factor is large and the initial tax rates on resources and profits are small if the initial tax system is sub optimal with a negligible tax on resources profits rise as well