a political economy model of congressional careers our main goal is to quantify the returns to a career in the united states congress we specify a dynamic model of career decisions of a member of congress and estimate this model using a newly collected dataset given estimates of the structural model we assess reelection probabilities estimate the effect of congressional experience on private and public sector wages and quantify the value of congressional seat moreover we assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns from a career in congress

sustainability as a fair bequest an evaluation challenge abstract in contrast to conventional approaches the conceptualisation of sustainability as fair bequest makes it possible to consider a finite time horizon valuation is necessary to determine whether the bequest package that is passed on from one generation to the next is fair acknowledging the merits as well as the limitations of economic price theory this paper differentiates between three classes of valuables the essential the useful and the unique it is argued that a fair bequest package should contain items from each of the classes because the three classes are incommensurable fairness of the bequest cannot be expressed by a single figure like a non declining total value of the package we then discuss which methods are appropriate for describing a bequest package with respect to its fairness

reducing bureaucratic corruption interdisciplinary perspectives on what works abstract this article offers the first comprehensive review of the interdisciplinary state of knowledge regarding anti corruption policies with a particular focus on reducing corruption among civil servants drawing on the work of economists political scientists sociologists and anthropologists we examine seven policy categories 1 rewards and penalties 2 monitoring 3 restructuring bureaucracies 4 screening and recruiting 5 anti corruption agencies 6 educational campaigns and 7 international agreements notably rigorous empirical evaluation is lacking for the majority of commonly prescribed anti corruption policies nevertheless we find growing evidence of the effectiveness of policies based on monitoring including anti corruption audits and e governance in addition adequate civil service wages seem to be a necessary but insufficient condition for control of corruption an emerging skepticism regarding the effectiveness of anti corruption agencies also is apparent in the literature we conclude with broader lessons drawn from our review such as the recognition that when corruption is a systemic problem it cannot be treated in the long term with individual level solutions

separation of powers and political accountability political constitutions are incomplete contracts and therefore leave room for abuse of power in democracies elections are the primary mechanism for disciplining public officials but they are not sufficient separation of powers between executive and legislative bodies also helps to prevent the abuse of power but only with appropriate checks and balances checks and balances work by creating a conflict of interest between the executive and the legislature yet requiring both bodies to agree on public policy in this way the two bodies discipline each other to the voters advantage under appropriate checks and balances separation of powers also helps the voters elicit information

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

intertemporal equilibria and exhaustible resources an overlapping generations approach abstract this paper presents a general equilibrium model of an abstract intertemporal economy with overlapping generations production possibilities and capital investment under the constraint of a nonreproducible natural resource the model provides for institutionally mandated asset transfers between successive generations under the assumption that each generation has perfect foresight concerning future prices and economic conditions competitive exchange supports a multiplicity of pareto efficient equilibria that correspond to particular asset transfer regimes the achievement of a desirable distribution of welfare between present and future generations requires that the asset transfer regime be chosen according to a social welfare function or explicit distributional criterion economic efficiency per se is insufficient to ensure social optimality these results have important implications for resource planning in the real world where policy makers and the public at large are often highly concerned over the potential impacts of current resource utilization on the welfare of future generations

defining energy security takes more than asking around abstract in undetermined the recent contribution by benjamin sovacool proposes 20 dimensions and 320 indicators of energy security in asia however the method for identifying these dimensions and indicators 64 semi structured interviews has three shortcomings first asian policy makers responsible for energy security are absent from the pool of respondents dominated by academics second no prioritization or contextualization of energy security concerns is attempted leading to an excessively long generic list third no disagreements between the interviewed experts are accounted for future attempts to define energy security based on perceptions should involve relevant social actors include mechanisms for discriminating between primary and secondary concerns and find ways to constructively report on disagreements less

an overlapping generations model with exhaustible resources and stock pollution this paper analyzes the nexus between resource exhaustion and pollution externality using an overlapping generations framework where each generation lives only for a finite period for a finite horizon model with production where there are many agents per generation the pareto inefficiency arises due to lack of intragenerational coordination and is propagated across generations the tax rates necessary for correcting this externality are characterized we also derive a modified hotelling rule according to which the equilibrium resource price rises slower than the rate of interest in order to account for the damages due to the pollution stock generated by the resource used for the case where the externality induced damage acts on production rather than the utility function pareto inefficiency is shown to persist even when there is intragenerational coordination

intergenerational transfers and the social discount rate this paper investigates the relationship between intergenerational asset transfers and the choice of the discount rate for use in cost benefit analysis in a model of a competitive overlapping generations economy constrained by a socially managed exhaustible resource provided that there are no distortions in capital markets and that all agents hold perfect foresight cost benefit techniques will result in a pareto efficient resource allocation if the discount rate is set equal to the market rate of interest but since the path of the interest rate depends on the level of intergenerational transfers cost benefit techniques do not ensure a socially desirable distribution of welfare between generations a social optimum will result only if intergenerational transfers are properly chosen and enforced decentralized private altruism may result in intergenerational transfers that both present and future individuals would agree are too small if members of the present generation attach positive weight to the general welfare of future generations not simply their personal descendants in a world where intergenerational transfers are non optimal second best policy making may imply a constrained optimum that is inefficient together these findings suggest that cost benefit analysis is at best a partial criterion to policy formulation that should be used only in conjunction with ethical principles that define the proper distribution of welfare between present and future generations

electoral competition and politician turnover abstract in this paper we analyze the selection by opportunistic parties of the candidates who run for election we consider a setting with incomplete but symmetric information about the candidates abilities in which electoral campaigns provide voters with additional information about candidates parties care only about selecting an appropriate candidate to win the election while voters elect the best candidate conditional on their information we first argue that in order to defeat an established very good candidate of its rival a party may favor a new candidate with highly uncertain ability rather than an established good candidate next we establish that the discrepancy between the objective of parties and the objective of the electorate leads to inefficient conservatism in the selection of candidates i e each party keeps its incumbents too often from the voters viewpoint

limits to economic growth as shown by a computable general equilibrium model abstract economic growth is distinguished from commercial growth and is defined in this article as the growth of the value a society puts in monetary terms on all commercial and non commercial goods and values it possesses during a certain period a computable general equilibrium model is used to show the impact of changes in the endowments preferences and production possibilities on economic income which in the model comprises all wealth besides land with its natural resources and labor energy is the key endowment to drive an economy the model leads in an intuitive way to the following conclusions 1 societies should start to use appropriate indicators for true economic growth rather than just for commercial growth as measured by gross national product 2 all types of economic growth are limited no matter if based on endowment growth production efficiency growth or changes in preferences 3 economic growth should be oriented more towards increasing production efficiency and less towards using more natural resources 4 human population growth puts at risk the possibilities for average economic growth per person 5 we should get better prepared to use solar energy in the future 6 besides economic growth there exists pure utility growth which is not measurable in monetary terms it includes much of scientific progress in the long run and is of great importance even though it cannot be included in an indicator of economic growth

european energy policy a review this article presents the implemented policies of the european union in the broader field of energy and provides a picture of the union s strategy on energy related issues a brief historical background is provided covering the period from the beginning of the union s creation in 1951 when coal was considered as the heart of its economic growth up to 2012 policy development principles as well as the consultations that take place before the proposal of each option are also discussed implemented policies are classified into seven broad categories renewable energy energy efficiency and savings internal energy markets security of energy supply environmental protection nuclear energy and research and development for each category an introduction covering important milestones towards its development is followed by the presentation of the relevant policies and a description of their purpose

challenges and countermeasures of china s energy security china is now a major consumer and importer of energy and its choices and policies will increasingly affect the rest of the world this paper analyses the key features of china s energy policy as it faces the prospect of possible challenges to its energy security given the increasing reliance on fuel imports and the need to transform its energy to meet the requirements of a modern fast growing economy the paper examines whether the current energy mix is appropriate and sustainable and considers the china s policymakers new emphasis on energy efficiency conservation renewable energy and the shift to natural gas the primary energy source it examines the internal and external constraints on china s energy policy and considers the strategic dilemmas arising from china s increasing involvement in international energy markets it concludes that both the domestic and international implications of china s search for energy security will confront policymakers with hard choices that will affect not only energy policy but also china s geopolitical grand strategy

energy and climate policy in china s twelfth five year plan a paradigm shift the twelfth five year plan fyp endorsed by the people s national congress in march 2011 plays a crucial role in shaping china s development trajectory over the next decades and especially for the fulfillment of the 40 45 carbon intensity reduction target by 2020 the plan will condition both the medium and long term perspectives of economic restructuring rebalance between the inclusive economic growth and environmental objectives which are compounded by multiple constraints faced by china such as aging population natural resources depletion energy supply security and environmental deterioration this article investigates the major energy and climate targets and actions specified in the 12th fyp to gain insights into the nature and magnitude of challenges and difficulties with regard to the medium and long run economic and environmental policies it points out that china should articulate sectoral policies with the global climate mitigation targets to avoid long term carbon lock in based on an in depth analysis of the objectives in the plan it is argued that the implementation should include mainstreaming developments of appropriate instruments to support cost effective energy efficiency improvements and carbon intensity reduction in the next five years

does electoral accountability affect economic policy choices evidence from gubernatorial term limits this paper analyzes the behavior of u s governors from 1950 to 1986 to investigate a reputation building model of political behavior we argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model we find evidence that taxes spending and other policy instruments respond to a binding term limit if a democrat is in office the result is a fiscal cycle in term limit states which lowers state income when the term limit binds

european union energy policy integration a case of european commission policy entrepreneurship and increasing supranationalism focusing on gas this article explores the role of the european commission in the process of european union energy security policy development and the extent to which the policy area is becoming increasingly supranational situating the article within the literature on agenda setting and framing it is argued that a policy window was opened as a result of enlargement to include more energy import dependent states a trend of increasing energy imports and prices and gas supply disruptions from the mid 2000s the commission contributed to a shift in political norms successfully framing import dependency as a problem requiring an eu level solution based on the institution s pre existing preferences for a diversified energy supply and internal energy market whilst member states retain significant sovereignty the commission has achieved since 2006 creeping competencies in the internal and to a lesser extent external dimensions of eu energy policy

the political economy of environmental policy with overlapping generations a two sector overlapping generations model illuminates the intergenerational effects of a tax that protects an environmental stock a traded asset capitalizes the economic returns to future tax induced environmental improvements benefiting the current asset owners the old generation absent a transfer the tax harms the young generation by decreasing their real wage future generations benefit from the tax induced improvement in environmental stock the principal intergenerational conflict arising from the tax is between generations alive at the time society imposes the policy not between generations alive at different times a pareto improving tax can be implemented under various political economy settings

active and passive waste in government spending evidence from a policy experiment we propose a distinction between active and passive waste as determinants of the cost of public services active waste entails utility for the public decision maker whereas passive waste does not we analyze purchases of standardized goods by italian public bodies and exploit a policy experiment associated with a national procurement agency we find that i some public bodies pay systematically more than others for equivalent goods ii differences are correlated with governance structure iii the variation in prices is principally due to variation in passive rather than active waste and iv passive waste accounts for 83 percent of total estimated waste

the limits of meritocracy screening bureaucrats under imperfect verifiability abstract does bureaucratic ability predict promotion in governments we show that self reported performance in enforcing the one child policy predicts mayoral promotion in china however misreporting handicaps screening a non manipulated performance measure does not predict promotion we show that this is consistent with a model where a government has a meritocratic objective but underestimates the imperfect verifiability of performance rather than a model where a government is only interested in the illusion of meritocracy thus despite meritocratic intentions we challenge the notion that a successful promotion system effectively substituted for democratic institutions in explaining chinese growth

managerial incentive problems a dynamic perspective the paper studies how a person s concern for a future career may influence his or her incentives to put in effort or make decisions on the job in the model the person s productive abilities are revealed over time through observations of performance there are no explicit output contingent contracts but since the wage in each period is based on expected output and expected output depends on assessed ability an implicit contract links today s performance to future wages an incentive problem arises from the person s ability and desire to influence the learning process and therefore the wage process by taking unobserved actions that affect today s performance the fundamental incongruity in preferences is between the individual s concern for human capital returns and the firm s concern for financial returns the two need be only weakly related it is shown that career motives can be beneficial as well as detrimental depending on how well the two kinds of capital returns are aligned it is well understood by now that informational externalities may place special demands on the organization of economic exchange simple price mediated markets will frequently fail in the presence of asymmetric information in that case more elaborate contractual arrangements have to be used as substitutes for the price system lately considerable effort has been devoted to the analysis of contracting under incomplete information with the objective to understand the range of economic institutions that emerge in response to the failure of the price system the analysis of moral hazard has played a prominent role in this development moral hazard problems arise when for some reason or another transacting parties cannot contract contingent on the delivery of the good for instance in buying labour services it may be that the amount of labour supplied is not directly observable precluding a simple exchange of wage for labour as a partial remedy to this problem an imperfect mutually observed signal about the supply of labour can be used as a proxy in the contract frequently output is taken as such a proxy the drawback is that output is often influenced by other factors than labour input which induce undesirable risk into the contract one is therefore faced with a tradeoff between allocating risk associated with incomplete observability and providing incentives for a proper supply of labour gaining insight into this tradeoff is important not only for understanding contracting in the small e g managerial incentive schemes but also because it is closely related to the fundamental tension between equity and efficiency in the society as a whole while our understanding of moral hazard has advanced a lot in past years it is clear that much work remains an important question that has received little attention until

chinese investments in europe s energy sector risks and opportunities abstract this paper analyses recent trends in chinese investment in the european energy sector these investments have increased in size targeted a wider number of countries and entered multiple energy sectors in particular fossil renewable energies and energy infrastructure we highlight the significant opportunities for as well as the political and economic risks of chinese investments in the european energy sector on the one hand the benefits can be substantial as china s new role as a global investor offers substantial economic benefits and political partnership further benefits might potentially emerge from backward linkages of chinese investments to improve access to china s restricted markets yet our findings also point to growing concerns among policymakers and business managers in europe ranging from worries about unfair competition and economic risks to concerns about national security we conclude with policy recommendations for the european union and its member states

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

on the returns to holding political office is it worth it abstract the paper estimates causal effects of being elected in a local election on monetary returns the claim for causality is made in a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party but ultimately did not this research design is made possible thanks to a comprehensive detailed data set covering all swedish politicians who have run for office in the period 1991 2006 the analysis establishes that monetary returns from local politics are absent both in the short and long run by relating this null result to effects on the future political career the paper provides suggestive evidence that local politicians are not primarily motivated by money

paying politicians theory and evidence this paper looks at the theory behind the idea that paying politicians better will improve their performance the paper lays out a political agency model with adverse selection and moral hazard where politicians are subject to two period term limits this model provides a number of predictions about how the pay of politicians affects agency problems we also consider what happens when the pool of politicians is endogenous the main ideas in the model are confronted with data on u s governors jel d72 j33

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

chinese investment in the eu renewable energy sector motives synergies and policy implications abstract this paper addresses three questions how have trade and investment in wind and solar sectors evolved between the eu and china in recent years is there a link between rising trade conflicts and trade and investment trends and what wider motivations and synergies can be identified in chinese investments in the eu s re sector to address these questions we analyze trade and investment data as well as qualitative data including information from media and company reports large increases in trade and investment were followed by rapid falls since 2012 13 trade tensions have not led to increases in investment rather the inverse we find that chinese investment in these two sectors is very concentrated in germany the key motivation for investment is market seeking although r d is also important especially for wind most investments are greenfield a preference that has persisted over time our qualitative analysis of several key acquisitions indicates that technology integration and the consolidation of capacities across the supply chain were key motivations in most of the cases studied we conclude with some policy orientations

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

exposing corrupt politicians the effects of brazil s publicly released audits on electoral outcomes author s finan frederico ferraz claudio abstract this paper examines the extent to which access to information enhances political accountability based upon the results of brazil s recent anti corruption program that randomly audits municipal expenditures of federally transferred funds it estimates the effect of the disclosure of local government corruption practices upon the re election success of incumbent mayors in municipal elections comparing municipalities which were randomly audited before the elections with those audited after the analysis shows that the disclosure of audit results had a significant impact on the re election rates of mayors found to be corrupt for a one standard deviation increase in reported corruption the audit policy reduced the incumbent s likelihood of re election by 25 percent this effect is more pronounced in municipalities where radio stations are present and higher levels of corruption are identified these findings highlight the value of information and the role of the media in reducing informational asymmetries in the political process thus enabling voters to not only hold corrupt politicians accountable but also to reward non corrupt politicians

intergenerational competitive equilibria under technological uncertainty and an exhaustible resource constraint abstract this paper presents a model of competitive intertemporal equilibrium in a finite horizon overlapping generations economy facing technological uncertainty and an exhaustible resource constraint individuals form rational expectations regarding future prices and economic conditions and income is redistributed from one generation to the next through government mandated lump sum transfers under uncertainty the relationship between resource price appreciation and the interest rate is mediated by consumers risk aversion with respect to consumption in alternative states of nature the intuitively appealing proposition that the expected resource price rises at the expected rate of interest holds only as a special case if future generations are taken to be state contingent in the sense that their composition depends on the states of nature prevailing when they are born then equilibria are generally pareto efficient but if future generations are state independent so that the set of individuals born at a given date is independent of the prevailing state of nature then equilibria may be inefficient because markets do not exist where successive generations may equilibrate their marginal rates of substitution across consumption in alternative contingent states such inefficiencies may be remedied through the implementation of appropriate intergenerational transfers an optimal intergenerational welfare distribution may be supported as a competitive equilibrium if the income transfer regime is properly selected and enforced the social optima that result for a simple version of the model under the maximin welfare criterion indicate that greater sacrifices are required on the part of the present generation when future generations are taken to be state contingent than when they are regarded as state independent this finding provides a possible explanation for the extreme risk aversion of conservationists with respect to the welfare of future generations

an information rationale for the power of special interests political decisions are often biased in favor of special interests at the expense of the general public and they are frequently inefficient in the sense that the losses incurred by the majority exceed the gains enjoyed by the minority this article explains the bias in terms of information asymmetries and the free rider problem first incumbents increase their reelection prospects by biasing policy toward groups that are better able to monitor their activities second because smaller groups are better able to overcome the free rider problem of costly monitoring policy will be biased in their favor third the effect of asymmetric monitoring on voter welfare is ambiguous the inefficiencies created by the policy bias are offset by a positively valued selection bias incumbents of above average quality are more likely to survive voter scrutiny than are low quality types

the political economy of government responsiveness theory and evidence from india the determinants of government responsiveness to its citizens is a key issue in political economy here we develop a model based on the solution of political agency problems having a more informed an politically active electorate strengthens incentives for governments to be responsive this suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy the ideas behind the model are tested on panel data from india we show that public food distribution and calamity relief expenditure are greater controlling for shocks where governments face greater electoral accountability and where newspaper circulation is highest

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

comparative politics and public finance we propose a model with micropolitical foundations to contrast different political regimes compared to a parliamentary regime the institutions of a presidential congressional regime produce fewer incentives for legislative cohesion but more separation of powers these differences are reflected in the size and composition of government spending a parliamentary regime has redistribution toward a majority less underprovision of public goods and more rents to politicians a presidential congressional regime has redistribution toward powerful minorities more underprovision of public goods but less rents to politicians the size of government is smaller under a presidential regime this last prediction is consistent with cross country data

busting the princelings the campaign against corruption in china s primary land market using data on over a million land transactions during 2004 2016 where local governments are the sole seller we find that firms linked to members of china s supreme political elites the politburo obtained a price discount ranging from 55 4 to 59 9 compared with those without the same connections these firms also purchased slightly more land in return the provincial party secretaries who provided the discount to these princeling firms are 23 4 more likely to be promoted to positions of national leadership to curb corruption president xi jinping stepped up investigations and strengthened personnel control at the province level using a spatially matched sample e g within a 500 meter radius we find a reduction in corruption of between 42 6 and 31 5 in the provinces either targeted by the central inspection teams or whose party secretary was replaced by one appointed by xi accordingly this crackdown on corruption has also significantly reduced the promotional prospects of those local officials who rely on supplying a discount to get ahead

dynamic government performance honeymoons and crises of confidence we use a formal theoretical framework to explore the interplay between a government s longevity and its performance ministers perform well when their careers are valuable this is so when the government s duration is expected to be long the government s survival depends on its popularity and finally that popularity depends on its ministers performance the feedback loop between performance and longevity means that multiple rational expectations equilibria can arise ministers work hard for a popular government but divert efforts elsewhere if they believe the government is doomed these alternatives are both self fulfilling prophecies however the presence of perhaps small random events that buffet the performance and popularity of a government is sufficient to pin down a unique equilibrium we explore the dynamics that arise a crisis of confidence involving the rapid collapse of a government s performance is sparked when a sequence of negative shocks push the popularity of the government below a unique critical threshold

labor supply of politicians using data on members of the european parliament meps we examine the impact of salaries on the composition and the behavior of legislators employing a differences in differences approach we exploit the introduction of a law that equalized meps salaries which had previously differed by as much as a factor of 10 increasing salaries raises the fraction of meps who run for re election but decreases the quality of elected meps proxied by college quality salary has no discernible impact on effort or legislation output higher salaries induce more political competition

television and voter turnout i use variation across markets in the timing of television s introduction to identify its impact on voter turnout the estimated effect is significantly negative accounting for between a quarter and a half of the total decline in turnout since the 1950s i argue that substitution away from other media with more political coverage provides a plausible mechanism linking television to voting as evidence for this i show that the entry of television in a market coincided with sharp drops in consumption of newspapers and radio and in political knowledge as measured by election surveys i also show that both the information and turnout effects were largest in off year congressional elections which receive extensive coverage in newspapers but little or no coverage on television

power to the people evidence from a randomized field experiment on community based monitoring in uganda this brief summarizes the results of a gender impact evaluation study entitled power to the people evidence from a randomized field experiment on community based monitoring in uganda intervention started in 2004 and consisted of a training and a six month follow up in uganda the study observed that localized nongovernmental organizations encouraged communities to be more involved with the state of health service provision and strengthened their capacity to hold their local health providers to account for performance the community based monitoring project increased the quality and quantity of primary health care provision the program led to a significant increase in the weight of infants by 14 z scores and a significant decrease in child mortality by 33 utilization of outpatient services was significantly higher 20 percent in the treatment group and the overall effect across utilization measures is large and significant funding for the study derived from bank netherlands partnership program world bank research committee world bank africa region division swedish international development agency department for research cooperation

political careers or career politicians two main career paths are prevalent among politicians in modern democracies there are career politicians i e politicians who work in the political sector until retirement and political careers i e there are politicians who leave politics before retirement and work in the private sector in this paper we propose a dynamic equilibrium model of the careers of politicians in a political economy with a private sector and a political sector where individuals are heterogeneous with respect to their market ability as well as their political skills we characterize the conditions under which the two career paths emerge in equilibrium and establish a number of comparative statics results with respect to the quality of politicians and their careers

how to promote the growth of new energy industry at different stages abstract china is currently the world s largest emitter of carbon dioxide co2 vigorously developing new energy sources has become an important way to reduce co2 emissions therefore more and more scholars have studied effective ways to promote the development of new energy industry however most of the existing research use single equation linear models or static models to study the driving forces of the new energy industry this not only ignores the large number of dynamic relationships between economic variables but also produces endogeneity problems in order to overcome the shortcomings of existing research this paper uses vector autoregressive model to study the new energy industry the results show that energy consumption structure has a positive effect on the new energy industry in the short run but the effect is limited in the long run the impact of the agriculture industry is gradually narrowing over time due to the gradual reduction of crop acreage however the influence of economic growth is positive both in the short and long run this is due to the gradual optimization of industrial structure technological progress produces a similar impact owing to continued investment in research and development funding as well as research and development personnel

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

the political economy of dynamic elections accountability commitment and responsiveness we survey the literature on dynamic elections in the traditional settings of spatial preferences and rent seeking under perfect and imperfect monitoring of politicians we define stationary electoral equilibrium which encompasses notions used by barro 1973 ferejohn 1986 banks and sundaram 1998 and others we show that repeated elections mitigate the commitment problems of politicians and voters and that a responsive democracy result holds under general conditions term limits however attenuate the responsiveness finding we also touch on related applied work and we point to areas for fruitful future research including the connection between dynamic models of politics and economics

incumbent behavior vote seeking tax setting and yardstick competition this paper develops a model of the political economy of tax setting in a multijurisdictional world where voters choices and incumbent behavior are determined simultaneously voters are assumed to make comparisons between jurisdictions to overcome political agency problems this forces incumbents into a yardstick competition in which they care about what other incumbents are doing we provide a theoretical framework and empirical evidence using u s state data from 1960 to 1988 the results are encouraging to the view that vote seeking and tax setting are tied together through the nexus of yardstick competition

monitoring corruptible politicians does monitoring politicians corrupt activities induce a sustained reduction in corruption we use longitudinal data on publicly released audits of municipal governments in puerto rico to answer this question we find that corruption is considerably lower in municipalities with timely audits before an election however these municipalities do not exhibit decreased levels of corruption in subsequent audits in spite of this mayors in municipalities audited preceding the previous election have higher re election rates suggesting that audits enable voters to select more competent politicians we conclude that audit programs must be timely sustained and long term commitments in order to be effective

fighting corruption to improve schooling evidence from a newspaper campaign in uganda what are the most effective ways to increase primary school enrollment and student learning we argue that innovations in governance of social services may yield the highest return since social service delivery in developing countries is often plagued by inefficiencies and corruption we illustrate this by using data from an unusual policy experiment a newspaper campaign in uganda aimed at reducing capture of public funds by providing schools parents with information to monitor local officials handling of a large education grant program the campaign was highly successful and the reduction in capture had a positive effect on enrollment and student learning jel d73 i22 o12

china s sovereign wealth fund investments in overseas energy the energy security perspective abstract sovereign wealth funds swfs are state owned investment funds that invest in real and financial assets since the global financial crisis in 2008 swfs investments have resulted in national security concerns of host countries because swfs continue to expand rapidly and have become increasingly active in real time strategic transactions given this background china which has the biggest swf in the world is facing severe challenges of energy resources shortages while its plan is to accomplish social and economic development goals energy security is a key driving force of the energy investment policy of china s swfs this makes the swf investments more complicated and more politically sensitive the combination of sovereign rights and the strategic importance of energy also makes geopolitics more complicated and brings more uncertainty to swf investments this article explores the relationship between energy security and energy investments of china s swfs it is recognised that the energy investment of swfs must follow a sustainable path to coordinate energy security economic growth return on investment and national security concerns government policymakers are urged to balance the financial and political returns on swfs against potential negative effects the conclusion presents insights for policymakers energy scholars and swf researchers

do better paid politicians perform better disentangling incentives from selection the wage paid to politicians affects both the choice of citizens to run for office and the performance of those who are appointed first if skilled individuals shy away from politics because of higher opportunities in the private sector an increase in politicians pay may change their mind second if the re election prospects of incumbents depend on their in office deeds a higher wage may foster performance we use data on all italian municipal governments from 1993 to 2001 and test these hypotheses in a quasi experimental setup in italy the wage of mayors depends on population size and sharply rises at different thresholds we apply a regression discontinuity design to the only threshold that uniquely identifies a wage increase 5 000 inhabitants exploiting the existence of a two term limit we further disentangle the composition from the incentive component of the effect of the wage on performance our results show that a higher wage attracts more educated candidates and that better paid politicians size down the government machinery by improving efficiency importantly most of this effect is driven by the selection of competent politicians rather than by the incentive to be re elected

intergenerational altruism and the environment we construct an overlapping generations model of pollution externality in which individuals are altruistically linked to their offspring as in barro 1974 it is shown that steady state consumption may be a decreasing function of the intergenerational degree of altruism despite individuals altruism the competitive equilibrium is not optimal we thus study the social optimum and show that it can be decentralized

conservationist government policies and intergenerational equity in an overlapping generations model with renewable resources abstract this paper shows that in overlapping generations models incorporating renewable natural resources competition may lead to perpetually declining living standards in environments in which it is technically feasible to achieve intergenerationally equitable distributions of consumption first and second best conservationist government policies are examined these include forced nationalization of the entire stock of natural capital government open market purchases and sales of natural capital taxation of industrial use of resources and subsidies to private investments in natural capital

electoral accountability and corruption evidence from the audits of local governments we show that political institutions affect corruption levels we use audit reports in brazil to construct new measures of political cor ruption in local governments and test whether electoral account ability affects the corruption practices of incumbent politicians we find significantly less corruption in municipalities where mayors can get reelected mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives these effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punish ment is lower overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician s corrupt behavior jel d72 k42 017

the political resource curse this paper studies the effect of additional government revenues on political corruption and on the quality of politicians both with theory and data the theory is based on a political agency model with career concerns and endogenous entry of candidates the data refer to brazil where federal transfers to municipal governments change exogenously at given population thresholds allowing us to implement a regression discontinuity design the empirical evidence shows that larger transfers increase observed corruption and reduce the average education of candidates for mayor these and other more specific empirical results are in line with the predictions of the theory jel d72 d73 h77 o17 o18

popularity shocks and political selection abstract we observe that popularity shocks are crucial for electoral accountability beyond their effects on voters behaviors by focusing on brazilian politics we show that the disclosure of audit reports on the mis use of federal funds by local administrators affects the type of candidates who stand for election when the audit finds low levels of corruption the parties supporting the incumbent select less educated candidates on the contrary parties pick more educated candidates when the audit reveals a high level of corruption these effects are stronger in municipalities that have easier access to local media

the making of economic policy a transaction cost politics perspective economic policymaking as a political process the normative approach to policy analysis the positive view of political economy a synthesis the policy process in real time a theme transaction costs the transaction cost politics framework political outcomes and economic efficiency transaction cost analysis in politics mechanisms to cope with transaction costs in politics national differences two case studies to illustrate transaction cost politics tax and expenditure reform in the united states the gatt and national trade politics some reflections and suggestions some lessons for the policy process the role of the economist concluding comments appendix multiprincipal multitask agencies

taxes and bribery the role of wage incentives this paper presents a simple model to evaluate alternative payment schemes for tax inspectors in the presence of corruption we consider problems of both moral hazard which arises because taking bribes cannot be observed without costly monitoring and adverse selection since not all potential tax inspectors can be identified as being honest or dishonest we identify three wage regimes first one could pay the same wage that a tax inspector could earn elsewhere his reservation wage second one could pay a wage which solves the moral hazard problem i e deters bribery this we call an efficiency wage by analogy with recent models examined i n macro economics third the government could pay a wage below the reservation wage at which only the dishonest become tax inspectors the capitulation wage we make precise the conditions under which each yields the greatest amount o f tax revenues net o f administrative costs many countries in the developing world are undergoing structural adjustment programmes which require fundamental fiscal changes outside agencies advise restoration of budget balance a task which involves expenditure cuts and tax increases the treatment of public employee pay scales often poses a particular dilemma i n this process wages and salaries are a significant component of government expenditures and one important question concerns the extent to which wages rather than employment cuts should be used to save money there is sometimes a reluctance to advocate wage cuts stemming in part from a feeling that this might impair the performance of the public sector hence tanzi 1990 argues that a policy of wage cutting is likely to increase the inefficiency of public sector employees especially at a time when the public sector is expected to play a larger role in restructuring the economy p 16 in the context of tax collection the issue is particularly pressing given the need to raise more tax revenues a reduction in efficiency in this branch of the government i s likely t o mean that fewer returns are processed and when individuals living standards are squeezed their incentive to accept bribes in lieu o f collecting taxes i s increased o n this count i t i s even sometimes suggested that wages of tax inspectors should be increased to aid the effort to the comments of henry bienen john hey and two anonymous referees have been helpful in revising this paper the authors are also grateful t o the john m olin program for the study o f economic organization and public policy at princeton university and the pew charitable trusts for financial support mclaren also acknowledges support from the international finance section of princeton university none of the above should be implicated in any way see for example goode 1984 chapter 1 3 and gould and amaro reyes 1983

intergenerational resource rights efficiency and social optimality the discipline of economics is generally defined as the science of the allocation of scarce resources between competing social objectives given an initial distribution of resources between economic agents how would they behave so as to improve their welfare according to the pareto criterion the agents would exchange commodities until the opportunities for fruitful exchange were fully exhausted and no agent could be made better off without rendering at least one other agent worse off pareto efficiency is a powerful concept in microeconomic analysis provided that the initial distribution of property rights is equitable allocative efficiency gives rise to the best of all possible worlds acknowledging that the assumptions of perfect competition are often violated firms are monopolistic information is incomplete and externalities exist economists have argued for the modification of institutions so that economic reality will conform more closely to the assumptions of the model that yields such gratifying results but microeconomic theory has always maintained that allocative efficiency is in itself insufficient to maximize social welfare bator 1957 a social welfare function is required to discriminate a social optimum among the array of efficient allocations that correspond to alternative assignments of property rights though economists have posited alternative functional forms for the sake of pursuing conceptual arguments welfare functions have remained elusive constructs for well known theoretical and practical reasons consequently a sharp line of demarcation has been drawn between questions of efficiency the province of economics and equity the principal focus of ethical and political discourse in resource economics however the line demarcating efficiency and equity is often crossed the term optimal depletion appears regularly where only efficient depletion is meant while political debates about resource exploitation over time are laden with questions of the proper distribution of our natural patrimony between generations resource economists have predominantly espoused particular use rules that guarantee efficiency but overlook potential improvements in social welfare achievable through the reassignment of property rights across generations we document the evolution and current status of the misuse of the term optimal depletion in section ii we develop a simple two generation three period general equilibrium model in section iii to illustrate how alternative distributions of resource rights between generations relate to alternative pareto efficient solutions in section iv we demonstrate how different social welfare functions affect the optimal solution and associated assignment of resource rights between generations

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning

shifting policy priorities in eu china energy relations implications for chinese energy investments in europe shifting energy policy priorities both in china and the eu european union have transformed their bilateral relationship in order to assess the impact of domestic policy priorities on bilateral energy cooperation and climate policy this comparative study traces the evolution of eu and chinese approaches to energy policy and their relative emphasis on factors and frames such as availability efficiency affordability and environmental stewardship drawing on government documents and a data set of interviews with chinese policy makers experts and academics in 2015 2016 the article argues that while the eu started with a strong emphasis on environmental stewardship and moved towards a focus on affordability and availability china started with a strong emphasis on availability and has moved towards a greater emphasis on environmental stewardship this shift in frames on the chinese side and subsequent changes in subsidy structures and targets can partially explain the increase in investments in renewable energy technologies the article concludes that the chinese and eu perspectives have become more aligned over the past ten years coinciding with an increasing trend towards renewable energy in chinese energy investments in the eu for example in italy and the uk