policy implications of potential conflicts between short term and long term efficiency in co2 emissions abatement abstract this paper shows that under certain conditions including path dependence and lock in policies and measures leading to a cost effective ghg emissions mitigation in the short term may not allow reaching long term emissions targets at the lowest possible cost that is they might not be cost effective in the long term the reason is that in a situation where currently expensive technologies have a large potential for cost reductions through learning effects and r d investments the implementation of incentive based mitigation policies such as taxes or tradable permits will encourage the adoption and diffusion of currently low cost abatement technologies but might not be enough to make attractive the diffusion of expensive ones which is a necessary condition for these technologies to realise their cost reduction potential through the aforementioned effects a simple model and a numerical simulation are provided to show this possible conflict between static and dynamic efficiency which points out to the need to combine different instruments some aiming at short term cost efficiency such as incentive based environmental policy and others at encouraging dynamic cost reductions such as technology innovation policy

international control of subsidies and countervailing duties the range and number of cases of administered protection in the 1 980s suggests that it has begun to play an important role in shaping international trade flows as most of such cases are brought by the united states against developing country exporters they are also a matter of concern for developing countries in the uruguay round of trade negotiations the internationally negotiated code on subsidies and countervailing duties is ambiguous in its definition of legal subsidies and thus in the appropriate use of countervailing duties because the code is applied at the national level there is considerable pressure by domestic producers on administering agents to increase the use of such protective measures through the adoption of provisional measures while the investigation is being conducted and through the interpretation of criteria for coverage given that the most successful developing countries have been those which adopt the most neutral policies toward imported and domestic goods and between sectors domestically the very biased application of the subsidies and the trade policy distortions common in the countries examined together with the frequency of countervailing actions against the subsidies suggest that developing countries would benefit from abandonment of the subsidies in september of 1986 the world s trading nations agreed to begin a new round of multilateral trade negotiations to be called the uruguay round the previous negotiations the tokyo round ended in 1979 in the six intervening years 1980 85 seven countries and the european community eec initiated 1 155 antidumping cases there were also 425 antisubsidy cases half a hundred safeguards cases and several hundred other trade practice cases resulting from national attempts to interpret and enforce various international agreements table 1 the sheer number of such cases suggests that the terms and conditions on which goods are traded across national boundaries are being affected by the outcomes of such administrative processes as much as by the gradual unrolling of the tariff reductions agreed at the tokyo round the general agreement on tariffs and trade gatt and the codes which

section 337 and the protection of intellectual property in the united states the complainants and the impact under section 337 of the tariff act of 1930 a firm can challenge imports that infringe its u s intellectual property rights such as patents copyrights and trademarks based on publicly available information this paper examines the characteristics of firms that file complaints under section 337 and also evaluates how firms are affected by the outcomes we find a complaining firm compared with peer firms in the same industry is typically larger produces a more diverse range of products has invested more in intangibles and is no less profitable a finding of no violation significantly depresses the filing firm s profits compared to peers section 337 appears to protect innovators but its effectiveness in promoting more innovation cannot be demonstrated so clearly copyright 1996 by mit press

sale of visas a smuggler s final song is there a way of eliminating human smuggling we set up a model to simultaneously determine the provision of human smuggling services and the demand from would be migrants a visa selling policy may be successful at eliminating human smugglers by eroding their profits but it necessarily increases immigration in contrast re enforced repression decreases migration but uses the help of cartelized smugglers to overcome this trade off we study how legalisation and repression can be combined to eliminate human smuggling while controlling migration flows this policy mix also has the advantage that the funds raised by visa sales can be used to finance additional investments in border and internal controls employer sanctions and deportations simulations of the policy implications highlight the complementarities between repression and legalisation and call into question the current policies

strategic amnesty and credible immigration reform why do countries that impose employer sanctions to deter the illegal entry of foreign workers nevertheless grant amnesty to illegal immigrants in this article i provide a positive theory of amnesty provision in a model where the constrained optimal immigration reform involving the joint use of employer sanctions and border interdictions is time inconsistent in particular my framework demonstrates that host countries of immigration can enhance the credibility of their immigration reforms by binding their own hands and strategically granting a socially excessive amount of amnesty to illegal workers

the return of the reciprocitarians us trade policy today we are always willing to be trade partners but never trade patsies president ronald reagan state of the union message washington 1987

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

an ecological economic assessment of deregulation of international commerce under gatt this paper discusses the ecological economic implications of deregulation of trade as promoted by the general agreement on tariffs and trade gatt 1 this includes both environmental2 and socio economic factors such as standards of living and equity we outline fifteen overlapping problems with deregulation or free trade we argue that many environmental problems cannot be resolved equitably efficiently or sustainably by unregulated markets and that there is no alternative to public intervention in certain situations we repeat the 1987 brundtland commission s question of how far into international trade should regulation penetrate wced 1987 the commission s call for gatt s environmental reform 3 has not yet been heeded

technology diffusion and public policy a useful typology of technological change is provided by the schumpeterian trilogy invention the generation of new ideas innovation the development of those ideas through to the first marketing or use of a technology and diffusion the spread of new technology across its potential market until recently policy schemes in most oecd countries have tended to focus predominantly on the invention and innovation or science and r d end of this technology spectrum see e g limpens et al i 992 although it is generally realised that it is the process of diffusion or use of technology that creates productive potential and competitiveness policy initiatives have largely bypassed opportunities to improve the diffusion process if this may seem misplaced emphasis it does in fact reflect the state of the academic literature which is wide ranging and extensive as it relates to policies on r d but small and fragmented as regards policies on diffusion currently a gradual reorientation of policy direction toward diffusion seems to be taking place the us and uk governments for example have recently proposed major technology policy initiatives that despite differences in emphasis both stress the importance of creating an infrastructure conducive to a rapid spread of awareness and knowledge of innovations we argue that although sensible in themselves such policies may be too limited in scope and that a broader policy stance may be needed this paper has two main objectives the first is to provide an overview of why policy intervention in the diffusion process may be desirable and what form it might take this discussion is rather long since to the best of our knowledge there is no published systematic synthesis of the diffusion policy literature though see stoneman i987 for an earlier attempt the second aim is to look at actual diffusion policies and their impacts to make the task manageable we are restricting this paper to a discussion of the diffusion of new process technologies although similar issues apply to new consumer technologies these are not explicitly addressed we also consider diffusion policy only within the context of a given institutional and macroeconomic environment although it may well be that the supply of skilled manpower the nature of the capital market animal spirits and entrepreneurship fiscal and monetary policies will all impact upon the diffusion path improvements in these areas will also impact upon a whole host of other aspects of the economy s performance to use a plea for diffusion policy as a rationale for changes in such areas would be equivalent to the tail wagging the dog and thus they fall outside the remit of this paper

migrants savings the probability of return migration and migrants performance this paper highlights a difference between migrants and the native born namely a positive probability of return migration the analysis demonstrates that this probability results in migrants saving more than comparable native born this differential may explain why even if all workers are perfectly homogeneous in skills migrants often outperform the native born in the receiving economy excerpt

the welfare effects of illegal immigration abstract this paper extends the work of ethier on illegal immigration by examining the optimal level of enforcement for the labor importing country in a two country model and by considering the effects of allowing capital mobility we derive a formula for the optimal level of enforcement against firms that hire illegal workers and show that the presence of enforcement costs makes the policy less efficient than a wage tax with capital mobility foreign workers gain from an increase in enforcement in the home country because capital is driven out of the home country

instrument choice for environmental protection when technological innovation is endogenous this paper compares qualitatively and quantitatively the welfare effects of emissions taxes auctioned emissions permits and free grandfathered permits when technological innovation is endogenous we find that there is no unambiguous case for preferring any of these policy instruments the relative welfare ranking of instruments depends on the costs of innovation the extent to which innovations can be imitated the slope and level of the marginal environmental benefit function and the number of polluting firms we illustrate the types of situations when there can be significant welfare discrepancies between the policies and when there are not

the impact of environmental policy instruments on innovation a review of energy and automotive industry studies various types of policy instruments have been implemented to reduce local and global emissions but the impact on innovation of different instruments has received less attention this paper reviews empirical studies of the innovation impact of four main types of policy instruments in two high emitting sectors the conclusions are threefold 1 policy plays a key role for the development and diffusion of environmental innovation in the studied sectors 2 different types of instruments promote different types of innovations general economic instruments has primarily encouraged incremental innovation general regulatory instruments has enforced improvements based on modular innovation and technology specific instruments appears to have been needed to support the development and deployment of radically new technologies 3 all types of policy instruments face challenges in design and implementation understanding the selection impact of the chosen instruments implementing increasing stringency levels committing to an appropriate scale and safeguarding policy stability

turning a blind eye costly enforcement credible commitment and minimum wage laws in many countries non compliance with minimum wage legislation is widespread and authorities may be seen as having turned a blind eye to a legislation that they have themselves passed but if enforcement is imperfect how effective can a minimum wage be and if non compliance is widespread why not revise the minimum wage this paper examines a minimum wage policy in a model with imperfect competition imperfect enforcement and imperfect commitment and argues that it is the combination of all three that produces results which are consistent with a wide range of stylized facts that would otherwise be difficult to explain within a single framework we demonstrate that turning a blind eye can indeed be an equilibrium phenomenon with rational expectations subject to an ex post credibility constraint since credible enforcement requires in effect a credible promise to execute ex post a costly transfer of income from employers to workers a government with an objective function giving full weight to efficiency but none to distribution is shown paradoxically to be unable to credibly elicit efficiency improvements via a minimum wage reform

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

technology choice for reducing nox emissions an empirical study of chinese power plants abstract this study investigates the choices of denitration technology in the chinese thermal power sector using a multinomial logit model of the choices among 1135 boilers in thermal power plants operating in china in 2013 we analyze how the choices were influenced by government policies the stringency of national standards and subsidies for using specific technology the results are as follows first china s 12th five year plan might make it more attractive for plants to choose the cheapest denitration technology among the three options examined in this study second technology choices differed significantly by region before the 12th five year plan period these differences have disappeared perhaps due to the economic development across all regions of china third electricity price subsidies offered to plants that use denitration equipment might affect their technology choice these results suggests that plants might choose the cheapest technology available in order to lower investment costs

what triggers environmental management and innovation empirical evidence for germany abstract it is frequently hypothesized that environmental management systems emss may improve firms environmental innovation performance whether this hypothesis is true is as critical for environmental policy as questions pertaining to the relevant incentives for 1 a firm s voluntary adoption of an ems and 2 its environmental innovation behavior based on ample empirical evidence for german manufacturing this paper addresses the simultaneity of these issues on the basis of a recursive bivariate probit model that explores the hypothesis that a facility s decision on innovation activities is correlated with the decision on ems adoption our empirical results indicating that environmental innovation activities are not associated with ems implementation nor any other single policy instrument reflect the perceptions of the survey respondents and hence should be interpreted as correlations rather than causal relationships according to these perceptions innovation behavior seems to be mainly correlated with the stringency of environmental policy

services tradeability trade liberalization and foreign direct investment textabstractthe article analyzes a two country general equilibrium model to examine the role played by services in the world economy services play an increasingly important role in the world economy as observed for instance by the growing share in employment production exports and foreign direct investment firms increasingly delegate costly knowledge intensive intermediate stage processing activities in their production processes to specialized outside producers in order to gain cost advantages countries generally differ in the extent to which producers in final goods sectors have the opportunity to gain cost advantages by using knowledge intensive producer services in the article the authors concentrate on trade patterns between countries that are similar in all respects except that one country lacks a producer services sector the authors also develop a general equilibrium model in which a home country and a foreign country both produce a manufactured good and a basic commodity called food

the political economy of refunded emissions payment programs abstract we study the effects on the equilibrium tax of refunding firms pollution tax payments can lobbying yield stricter environmental policy do imperfect property rights affect policy clean firms may favor higher pollution levies but insecure property rights reduce this incentive

emission taxes and optimal refunding schemes abstract we examine how refunding emission taxes to firms dependent on market shares should be designed while refunding is harmful under perfect competition a first best self financing tax tax refunding scheme exists if the marginal damage from pollution exceeds the marginal distortion in an imperfectly competitive output market with symmetric firms under pre investment in cleaner technology with short term abatement opportunities a first best refunding scheme exists if pollution refunding can be made dependent on both market and investment shares

new issues in the uruguay round and beyond the general agreement on tariffs and trade gatt is a treaty establishing a framework of rules and principles for policies affecting merchandise trade it also provides a forum in which sovereign states periodically engage in reciprocal trade liberalisation and rule making 2 as a result of substantial reductions in tariffs through periodic rounds of multilateral negotiations rule making has gradually become as if not more important than liberalisation per se starting with the kennedy round i964 7 but especially in the tokyo i973 9 and uruguay i986 rounds an increasing number of agenda items involved the negotiation of rules and disciplines for specific trade related domestic policies rather than further reductions in tariffs and other border measures rules pertaining to product standards subsidies and government procurement were prominent items on the agenda of the tokyo round the uruguay round further expanded the multilateral negotiating agenda by adding trade related investment measures trims trade related intellectual property rights trips and measures affecting the contestability of service markets the trend for multilateral trade negotiations to address domestic policies shows no sign of abating calls for a post uruguay round negotiation have identified issues such as competition policy foreign direct investment fdi regulations innovation policies and the interaction between trade and environmental policies as possible topics for discussion 3 in part the steady agenda expansion reflects changes in the structure of the global economy the managerial and technological innovations of the last decade such as just in time inventory management and the increased tradeability of services created pressures for greater specialisation and geographical splintering of production this in turn made regulations pertaining to services fdi transfer of technology and protection of intangible assets more important for both governments and firms flows associated with services fdi and intellectual property ip are smaller than merchandise trade but are quite substantial table i reveals that global merchandise trade in i990 was 3 5 trillion while world trade in commercial services was about 820 billion global receipts for ip were some 33 billion and income flows

determining the need for issue linkages in multilateral trade negotiations in multilateral trade negotiations trade offs usually are made within the issue areas that are on the agenda in the absence of cross issue trade offs linkages agreement may not be possible to maximize both the potential gains from trade and the scope for agreement negotiators need to be willing and able to consider the feasibility of issue linkages this raises the practical problem of determining when such trade offs are likely to be necessary although quantitative methods of policy analysis have been developed they have not been widely used by policymakers in part owing to the fact that negotiations focus largely on nontariff measures this article proposes a qualitative approach to the problem and applies it to the tokyo and uruguay round negotiations on safeguards to protect domestic industries from problems related to increases in imports

the twilight of domestic economic policies twilight partial darkness fig gradual decay or destruction of something once glorious t state hysterical state of unawareness of external realities i annual report bank for international settlements basle june 1981 p 25 world economic outlook international monetary fund washington june 1981 pp 8 9 oecd observer organisation for economic cooperation and development paris july 1981 p 13

cascading contingent protection abstract this paper extends the literature on the incentive effects of contingent protection by identifying and analyzing the vertical linkages that may exist across instances of contingent trade policy it is shown that the accessibility of contingent protection in a downstream industry may provide additional inducement for upstream suppliers of intermediate inputs to pursue contingent protection as well in general access to instruments of contingent protection at more than one stage of the production stream enhances the opportunity for components producers to engage in indirect rent seeking contingent protection may be pursued precisely because of the likelihood of downstream injury and cascading protection

time consistency of fiscal and monetary policy the problem of time inconsistency arises from two different sources first as shown by guillermo a calvo 1978 the re is an incentive for each government to engage in an initial unanti cipated inflation second as discussed by robert e lucas and nancy l stokey 1983 there is an incentive for each government to deviat e from the path of taxes announced by the preceding government in th is paper it is shown that these two sources of time inconsistency ca n be removed by a particular method of debt management involving bot h nominal and indexed government bonds of various maturities copyright 1987 by the econometric society

refunded emission payments theory distribution of costs and swedish experience of nox abatement in this paper we discuss the effect of refunding environmental charges taxes are often resisted by polluters because they imply both abatement and tax costs when charges are refunded the incentives for abatement are essentially the same as for a tax as long as there are many producers the incidence and distribution of costs is however different lower net tax payments reduce resistance from the polluters and make refunded emissions payments politically easier to implement at a sufficiently high charge level to have significant abatement effects we describe and examine the refunded emissions payment scheme as a policy instrument and compare it with taxes and permits with regard to allocative properties distribution of costs property rights and consequently the politics of implementation as an empirical example the swedish charge on nitrogen oxides is analyzed

innovation and diffusion of environmental technology industrial nox abatement in sweden under refunded emission payments we study the actual process of technical change in the case of nox abatement from large stationary sources that have been regulated by very forceful policies in sweden considerable progress has been made in lowering aggregate emissions and this paper seeks to disaggregate average industry improvements to study how much of it is due to innovations by first movers and how much is achieved by adoption and diffusion of technology we find both factors very important innovation has been rapid the best firms have cut emissions on the order of 70 in spite of this reductions have actually been even more rapid for the majority of firms so that the median firms have caught up with best practice we analyze various characteristics of the technological change observed

coming out of the shadows learning about legal status and wages from the legalized population the 1986 immigration reform and control act irca granted amnesty to approximately 1 7 million long term unauthorized workers in an effort to bring them out of the shadows and improve their labor market opportunities an analysis of wages using panel data for a sample of legalized men provides evidence that wage determinants are structurally different after amnesty for them but not for the comparison group as measured during the same time periods the wage penalty for being unauthorized is estimated to range from 14 to 24 the wage benefit of legalization under irca was approximately 6

incentives for advanced pollution abatement technology at the industry level an evaluation of policy alternatives abstract in this research we evaluate the incentive effects of five environmental policy instruments to promote the development and adoption of advanced pollution abatement technology in a heterogenous industry from most to least incentive the policy instruments can be rank ordered as follows i auctioned permits ii emissions taxes and subsidies iii issued marketable permits iv performance standards including performance standards in this list necessitates the assumption that they are differentiated between heterogeneous firms before the technology adoption in a way which replicates the initial emissions control distribution of the efficient incentive based instruments with the starting point normalized in this fashion the instrument rankings are invariant with respect to the size of firms the size of the industry or the industry s abatement cost structure

trade protectionism in australia its growth and dismantling protection from import competition was a defining feature of the birth of the australian federation in 1901 for the next 70 years the extent of protection grew and broadened from mainly tariffs to also involving import licencing after world war ii there was a one off 25 across the board cut in tariffs in 1973 and some dismantling of agricultural subsidies but that was followed by the re imposition of import quotas for the most protected manufactured goods then in the mid 1980s a new reformist government began a long process of dismantling all protection as part of an overall economic reform program that also involved de regulation privatization and moving to a flexible exchange rate the rewards included three decades of faster economic growth and an unprecedented rise in australians living standards this paper provides a history of economic thought on the pros and cons of protectionism for the small distant natural resource rich australian economy and a survey of the literature on the extent effects and political economy reasons behind the growth of australian protection and its eventual dismantling

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

investment policies in the gatt host country policies toward inward direct investment can have predictable effects on trade flows trade related investment measures trims such as local content requirements and minimum export requirements have recently come under official scrutiny in the general agreement on tariffs and trade this paper examines the economic and political context of the uruguay round negotiations on trims in the negotiations investment measures have been treated as a particular instance of a broader problem the proliferation of nontariff trade distortions as with other trade distortions the negotiating strategy has been to identify specific policies to be proscribed or limited however this approach ignores the typical interactions between multinational firms and host governments observed investment regimes are often the result of a lengthy and complex bargaining process while some investment regimes actually alter the allocation of resources in production and trade others affect mainly the distribution of rents between firms and host countries in particular the trade impact if any depends as much on economic conditions as on the specific combination of investment measures imposed this abstract was borrowed from another version of this item

competition competition policy and the gatt the authors argue that further moves to liberalize trade and to implement existing gatt rules and principles may have a greater impact on global competition than would the pursuit of harmonization of competition policy they also suggest that current gatt rules and case law provide scope for disputes to be brought before the gatt that relate to both the application and the nonapplication of existing domestic competition laws of gatt contracting parties this leads to de facto discrimination between domestic and foreign products little use has been made of the gatt in this connection perhaps existing indirect avenues for raising competition related disputes in the gatt should be pursued more actively this would help identify what specific government policies might be the subject of multilateral negotiations and explicitly incorporated into the gatt framework

a tale of two market failures technology and environmental policy abstract market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies these combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives and can be cost effectively harnessed through the use of economic incentive based policy in the presence of weak or nonexistent environmental policies investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable positive knowledge and adoption spillovers and information problems can further weaken innovation incentives while environmental technology policy is fraught with difficulties a long term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success

the road to uruguay context and to show how its agenda and procedures as well as its problems and possible outcomes have arisen from the conjunction of developments in patterns of world trade and the evolution of the gatt itself the uruguay round has some novel features but it also strongly reflects the continuation of the trends of the last forty years the gatt has fostered the evolution of the world trading system from a highly restrictive form with two major players the us and the uk towards a more liberal and evenly balanced form the practices appropriate to the former circumstances achieved many of their objectives but they proved gradually less able to cope with the strains of the new circumstances and problems thus the gatt s traditional bilateral mode of tariff negotiations has given way first to a more multilateral form of tariff talks and then to a preoccupation with constitutional issues such as trading rules and the sectoral coverage of the gatt its procedures have become progressively more multilateral but especially when one considers trade policy implemented between gatt rounds its outcomes appear recently to have become less so it is paradoxical that whereas initially the gatt harnessed the crude power of bilateralism to achieve multilateral outcomes it has more recently adopted multilateral procedures but with more bi and pluri lateral results

tariffs as insurance optimal commercial policy when domestic markets are incomplete free trade is not optimal for a small country that faces uncertain terms of trade if some factors are immobile ex post and markets for contingent claims are incomplete the government can improve social welfare by using commercial policy that serves as a partial substitute for missing insurance markets using a combination of analytical and simulation techniques we demonstrate that optimal policy for this purpose will often have an anti trade bias we also show that the usual preference by economists for factor or product taxes and subsidies over tariffs and export subsidies may not be justified in this context this abstract was borrowed from another version of this item