variable returns to scale in production and patterns of specialization this paper discusses some trade and welfare implications of the two sector model based on increasing returns to scale irs in one industry and decreasing returns to scale drs in the other it has been shown by horst herberg and murray kemp that given homothetic production functions with irs in one industry and drs in the other the production possibilities frontier ppf is strictly concave to the origin near the irs axis and strictly convex to the origin near the drs axis while this result constitutes an important finding and is contrary to the general impression among economists even twelve years after the publication of herberg and kemp s paper no attempt has been made to analyze its implications for welfare and patterns of specialization in this paper i consider a simple twocommodity model with irs in one industry and drs in the other and discuss some interesting implications of variable returns to scale vrs first i demonstrate that in this model if a small open economy specializes completely in production it will do so in the drs commodity and not in the irs commodity as is generally believed second if at a given price ratio an internal production equilibrium exists a welfaremaximizing small open economy will never specialize completely in production even though the ppf exhibits decreasing opportunity costs over a part of its range third given output generated economies and diseconomies of scale welfare maximization for a small country requires a permanent tax subsidy scheme encouraging expansion of the irs industry and contraction of the drs industry finally in a two country model with identical tastes and technology across the countries free trade equilibrium may result in incomplete specialization by the exporter of the irs commodity and complete specialization by the exporter of the drs commodity in the course of the analysis i argue that tinbergen s formulation of frank graham s case for protecting the irs industry is incorrect i then present a possible reformulation of it in section i the basic production model is introduced in section ii the model is analyzed and in section iii it is argued that all the results continue to hold in the multifactor case

stacking up the ladder a panel data analysis of tanzanian household energy choices energy use statistics in tanzania reflect the country s low level of industrialization and development in 2016 only 16 9 of rural and 65 3 of urban inhabitants in mainland tanzania were connected to some form of electricity we use a nationally representative three wave panel dataset 2008 2013 to contribute to the literature on household energy use decisions in tanzania in the context of the stacking and energy ladder hypotheses we firstly adopt a panel multinomial logit approach to model the determinants of household cooking and lighting fuel choices secondly we focus explicitly on energy stacking behaviour proposing various ways of measuring what is inferred when stacking behaviour is thought of in the context of the energy transition and presenting household level correlates of energy stacking behaviour thirdly since fuel uses have gender differentiated impacts we investigate women s bargaining power in the decision making process of household fuel choices we find that whilst higher household incomes are strongly associated with a transition towards the adoption of more modern fuels especially lighting fuels this transition takes place in a context of significant fuel stacking in tanzania government policy has been aimed mostly at connecting households to the electric grid however the public health environmental and social benefits of access to modern energy sources are likely to be diminished in a context of significant fuel stacking lastly we present evidence that the educational attainment of women in the household is an important aspect of household fuel choices

optimal trade policies for a developing country under uncertainty abstract this paper investigates optimal trade policies for a developing small open economy which faces international price uncertainty trade taxes are used to finance provision of a public good which enters the utility function of consumers if demands for private goods are independent of the public good the optimal composite tariff dominates the optimal quota if the optimal state contingent tariff increases with the foreign price the optimal specific tariff also dominates the optimal quota regardless of risk aversion however the ranking of the optimal specific tariff and the optimal quota generally depends on risk attitudes as well as ordinal preferences

fuel demand elasticities for energy and environmental policies indian sample survey evidence india has been running large scale interventions in the energy sector over the last decades still there is a dearth of reliable and readily available price and income elasticities of demand to base these on especially for domestic use of traditional fuels this study uses the linear approximate almost ideal demand system la aids using micro data of more than 100 000 households sampled across india the la aids model is expanded by specifying the intercept as a linear function of household characteristics marshallian and hicksian price and expenditure elasticities of demand for four main fuels are estimated for both urban and rural areas by different income groups these can be used to evaluate recent and current energy policies the results can also be used for energy projections and carbon dioxide simulations given different growth rates for different segments of the indian population

the choice between market failures and corruption because government intervention transfers resources from one party to another it creates room for corruption as corruption often undermines the purpose of the intervention governments will try to prevent it they may create rents for bureaucrats induce a misallocation of resources and increase the size of the bureaucracy since preventing all corruption is excessively costly second best intervention may involve a certain fraction of bureaucrats accepting bribes when corruption is harder to prevent there may be both more bureaucrats and higher public sector wages also the optimal degree of government intervention may be nonmonotonic in the level of income

can multinational enterprises light up developing countries evidences from the access to electricity in sub saharan africa summary this paper examines the role that multinational enterprises mnes and foreign direct investments fdi can have in enhancing the access to electricity for local communities in developing countries based on the quality of home and host institutions access to electricity is a marker for development but it is far from being universal in developing countries the shortage of electricity is mainly the consequence of inability of governments in planning financing and developing necessary electricity infrastructure in this context investments from other actors can be essential particularly we focus on the role of fdi and mnes we claim that when mnes invest in developing countries they are incentivized to solve the lack of electricity infrastructure mainly for two reasons to guarantee their business activities and to gain legitimacy with their local stakeholders in addition we argue that mnes and fdi from institutionally underdeveloped countries will be more prone to develop infrastructure for the provision of electricity to local population as generally they suffer from a negative stereotype for this study we rely on 1 547 observations composed of pairs of 83 home countries and 15 host countries in sub saharan africa observed from 2005 to 2011 due to the nature of the database we adopt panel data techniques i e system gmm and corrected least square dummy variable estimators we find that fdi promotes access to electricity in developing countries with weak institutions and this is more likely true when fdi come from institutionally underdeveloped countries these results are far from obvious as they controvert common idea among institutional scholars that a regulatory authority is essential in the provision of infrastructure in conclusion with this paper we partially rehabilitate the image of mnes investing in developing countries by demonstrating that under certain conditions they could contribute to energy poverty alleviation of local population

corporate led sustainable development and energy poverty alleviation at the bottom of the pyramid the case of the cleancook in nigeria summary corporations are increasingly viewed as key actors in poverty alleviation bottom of the pyramid bop advocates suggest that multinational corporations mncs can simultaneously alleviate poverty and make profits by selling scaled down products to the poor our paper investigates this claim using the case of the cleancook stove and fuel technology introduced in nigeria by an mnc working through a nonprofit organization and local business actors supply and demand side analyses show that the cleancook is least likely to reach the energy poor bop households originally targeted the evidence suggests that serving the bop requires greater differentiation than can be achieved with profit driven business models

does competition kill corruption corrupt agents officials or gangsters exact money from firms corruption affects the number of firms in a free entry equilibrium the degree of deep competition in the economy increases with lower overhead costs relative to profits and with a tendency toward similar cost structures increases in competition may not lower corruption the model explains why a rational corrupt agent may extinguish the source of his bribe income by causing a firm to exit assessing the welfare effect of corruption is complicated by the fact that exit caused by corruption does not necessarily reduce social welfare

modeling household cooking fuel choice a panel multinomial logit approach we use three rounds of a rich panel data set to investigate the determinants of household cooking fuel choice and energy transition in urban ethiopia we observe that the expected energy transition did not occur following economic growth in ethiopia during the decade 20002009 regression results from a random eects multinomial logit model suggest that households economic status price of alternative energy sources and education are important determinants of fuel choice in urban ethiopia the results also suggest the use of multiple fuels or fuel stacking behavior by households we argue that policy makers could target these policy levers to encourage transition to cleaner energy sources

fuelwood policies for the 1990s abstract the paper provides a review of policy issues and options associated with the role of biomass as an energy resource it seeks to demonstrate how such policies can be set in the context of local circumstances the analysis focuses on the relationship of fuelwood problems to other development issues recognizing that these problems are primarily a consequence of the interaction of environmental and economic forces at a local level a series of fundamental policy reforms are an essential pre condition to finding local answers to fuelwood problems these policy reforms are the main focus of this paper

gains from trade under variable returns to scale recently several trade theorists have investigated the welfare consequences of international trade under variable returns to scale for example kemp and negishi 11 using the revealed preference arguments obtain the sufficient conditions under which the opening of trade and an improvement in the terms of trade are nonharmful in the presence of variable returns to scale production subsidies and consumption taxes eaton and panagariya 7 reexamine these issues in the context of pareto welfare criterion it is noteworthy that the assumption of constant returns to scale is retained in their discussions on production subsidies and consumption taxes 1 the purpose of this paper is to explore the welfare implications of tariffs and consumption taxes as well as the welfare rankings of these policy instruments under variable returns to scale we obtain several interesting results for example social welfare for a small country can be maximized by introducing in addition to free trade a policy of production tax cum subsidy such that the output of the industry exhibiting greater smaller returns to scale is pushed to the maximum minimum a higher tariff rate needs not result in a lower welfare whereas a higher rate of consumption tax necessarily leads to a lower welfare furthermore a tariff may be superior to an equivalent consumption tax the paper evolves as follows the model and assumptions are presented in section ii section iii is the analysis regarding non optimality of free trade free trade versus no trade

poverty alleviation as business strategy evaluating commitments of frontrunner multinational corporations summary in the debate on how to combat poverty the positive role of mncs is frequently mentioned nowadays although doubts and criticism remain facing this societal debate mncs feel the pressure to formulate a position this paper analyzes mncs policies on their poverty alleviating potential frontrunner mncs turn out not to be very outspoken especially not on those issues that have the largest potential to help alleviate poverty placed in the context of other mncs behavior a sector coordinated morality seems important which means that a meso approach to poverty alleviation needs to complement the current global macro and individual company micro focus

reward structures and the allocation of talent as relative rewards that different professions receive are a key factor in the allocation of talent what determines the reward structure of a society is an important question this paper develops an equilibrium model of the allocation of talent between productive and unproductive activities such as rent seeking the existence of rent seeking creates a negative externality on productive agents and implies that relative rewards are endogenously determined the same externality can also lead to the existence of multiple equilibria each with different reward structures in a dynamic setting allocations of past generations as well as expectations of future allocations influence current rewards and the society may get trapped in a rent seeking steady state equilibrium the paper also discusses how the non pecuniary reward structure can be influenced by equilibrium selection and a historical example that suggests the presence of a causal link from the allocation of talent to non pecuniary rewards

corruption centralization and the shadow economy in their pioneering work on corruption shleifer and vishny 1993 find that a centralized bureaucracy results in lower bribes our paper extends the analysis to economies with formal and informal sectors when corrupt officials operate in both sectors bureaucratic centralization is beneficial when confined to the formal sector however we show that crosssector centralization can result in higher bribes and lower welfare furthermore contrary to choi and thum 2005 we demonstrate that depending on the organization of the bureaucracy and the productivity of the informal sector the presence of the shadow economy may have adverse effects on corruption and welfare

from linear fuel switching to multiple cooking strategies a critique and alternative to the energy ladder model abstract promoting sustainable development requires evaluating the technical and policy options that will facilitate the adoption and use of energy efficient and less polluting cooking stoves and practices the transition from traditional to modern fuels and devices has been explained by the energy ladder model that suggests that with increasing affluence a progression is expected from traditional biomass fuels to more advanced and less polluting fuels in this paper we evaluate the energy ladder model utilizing data from a four year 1992 96 case study of a village in mexico and from a large scale survey from four states of mexico we show that an alternate multiple fuel model of stove and fuel management based on the observed pattern of household accumulation of energy options rather than the simple progression depicted in the traditional energy ladder scenario more accurately depicts cooking fuel use patterns in rural households the multiple fuel model integrates four factors demonstrated to be essential in household decision making under conditions of resource scarcity or uncertainty a economics of fuel and stove type and access conditions to fuels b technical characteristics of cookstoves and cooking practices c cultural preferences and d health impacts this model also allows better estimates of the expected fuelwood demand and indoor air pollution in rural households

public sector organizations and agricultural catch up dilemma in emerging markets the orchestrating role of embrapa in brazil abstract how can an emerging economy beset by political economic and resource challenges jump start the technology catch up process in the agricultural sector and then forge an ecosystem to facilitate the continual generation and dissemination of innovations equally important how can it maintain the viability and salience of its catch up initiatives subsequent to the entry and inevitable dominance of multinational companies we answer these questions by studying catch up in brazil s soy seeds sector over four decades 1973 2015 in an environment of political and economic uncertainty embrapa a public sector organization forged partnerships to first develop absorptive capacity and innovation capabilities and then build an ecosystem of diverse organizations to generate and disseminate catch up outcomes to farmers and other end users embrapa also developed critical tacit knowledge and complementary assets that along with its emphasis on environmental sustainability and protecting national interests helped maintain its salience even after the entry and market dominance by multinational agribusinesses in addition to demonstrating critical roles for public sector organizations and public private networks in technological catch up in an emerging economy s agricultural sector our study calls into question the prevalent notion of technological catch up as a rush to reach the technological frontier at any cost

household biomass energy choice and its policy implications on improving rural livelihoods in sichuan china abstract it is widely known that a switch from traditional biomass energy to modern clean safe and efficient energy could improve local rural livelihoods by enhancing the access to high quality energy and reducing the negative impacts of traditional biomass energy on health environment and living standards hence in this paper we used alternative specific conditional logit model asclm to examine the rural household energy choice behaviors in sichuan province of china from the perspective of revealed and stated preferences the results show that the fuel switching in our study region is not a simple unidirectional process from traditional biomass energy to modern fuels as incomes improve household energy choice behaviors could be not only affected by energy specific characteristics such as fuel price smoky level and safety risk but also influenced by household specific factors such as income level age and educational level of the decision maker household demographic structure number of people frequently eating at home distance to the nearest biomass collecting spot and household location suggesting that government should attach more importance to simultaneously improve energy quality control energy price and enhance household socio economic status

a theory of collective reputations with applications to the persistence of corruption and to firm quality the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by his past behaviour and because his track record is observed only with noise by the group s past behaviour as well the paper thus studies the joint dynamics of individual and collective reputations and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality 1 collective reputations collective reputations play an important role in economics and the social sciences countries ethnic racial or religious groups are known to be hard working honest corrupt hospitable or belligerent some firms enjoy substantial rents from their reputations for producing high quality products some departments are reported to treat their faculty or students fairly the paper is a first attempt at modelling the idea of group reputation as an aggregate of individual reputations a member s current incentives are affected by her past behaviour and because her track record is observed only with noise by the group s past behaviour as well the paper studies the joint dynamics of individual and collective reputations in a model in which current generations are progressively replaced by new ones and derives the existence of stereotypes from history dependence rather than from a multiplicity of equilibria or from the existence of a common trait as is usually done in the literature see section 2 for a detailed comparison with the literature it shows that new members of an organization may suffer from an original sin of their elders long after the latter are gone and it derives necessary and sufficient conditions under which group reputations can be rebuilt last the paper applies the theory to analyse when a large firm can maintain a reputation for quality let us spell out the building blocks of our theory in more detail a a group s reputation is only as good as that of its members each member is characterized by individual traits such as talent diligence or honesty past individual behaviour conveys information about these traits and generates individual reputations

understanding the demand side issues of international corruption in global business business organizations and their representatives frequently encounter corruption and may be the perpetrators victims or simply participants in such acts while international corruption has existed in multiple forms for several years many individuals companies nations and international organizations are currently attempting to reduce or eliminate corrupt acts because of their harmful effects on local economies and the quality of life of citizens several of these corruption curtailment efforts have been directed toward the supply side of corruption i e those who make corrupt payments in developing an understanding of corruption however and formulating strategies for its reduction consideration must also be given to the demand side of corruption i e those who demand and accept corrupt payments accordingly this study examined the demand side of corruption and several related factors in the categories of government economy and poverty education geography and culture analysis of these factors employed the corruption perceptions index cpi formulated annually by transparency international ti and other sources several factors in each of the five categories were found to correlate significantly with perceived corruption and strategies for addressing these issues were developed and discussed

social investment through community enterprise the case of multinational corporations involvement in the development of nigerian water resources this paper examines the different mechanisms used by multinational corporations mncs in nigeria seeking to make long term social investments by meeting the critical challenge of improving water provision community enterprise an increasingly common form of social enterprise which pursues charitable objectives through business activities may be the most effective mechanism for building local capacity in a sustainable and accountable way traditionally social investments by mncs have involved either donations to a charity which then assumes responsibility for delivering social outcomes or direct management of social investment in house these approaches have been criticized however for their limited contribution to local capacity building their focus on short term outcomes and the restricted role that they afford to communities partnering with community enterprise provided there is sufficient local capacity to support it is the most effective mode of governance through which mncs can manage social investments in developing countries

tariff induced capital inflow and welfare under variable returns to scale abstract this paper extends recent studies on tariff immiserization in the presence of internationally mobile sector specific capital to include the possibility of non constant returns to scale it is shown that brecher and diaz alejandro s 1977 proposition does not necessarily hold that is under certain conditions tariff induced capital inflow improves the host country s welfare even if the foreign capital receives the full untaxed value of its marginal product

factors underlying rural household energy transition a case study of china abstract this paper identifies factors underlying the energy transition of rural households in china based on province level panel data for years of 1991 2014 it indicates that there exists the energy stacking process of rural household energy transition characterized by the significant consumption inertia effects of traditional biomass energy tbe traditional commercial energy tce and advanced commercial energy ace respectively the insignificant substitution effect of tce and ace for tbe and the significant partial substitution of ace for tce with regard to the factors underlying rural household energy transition 1 per capita disposal income is negatively correlated with tbe tce and ace consumption 2 the number of motorcycles is positively correlated with tce and ace consumption 3 the number of firewood saving stoves and the price for ace are positively correlated with tbe consumption 4 household size and the number of motorcycles and the number of appliances are positively correlated with ace consumption 5 education level is positively correlated with tbe but negatively with tce consumption 6 the number of rural energy management institutions is positively correlated with tbe but negatively correlated ace consumption therefore some policy implications are discussed

returns to scale in canadian manufacturing an interprovincial comparison this paper measures the degree of returns to scale at the two digit standard industrial classification sic in canadian manufacturing employing both gross output and value added data using a model developed by r j caballero and r k lyons the study distinguishes between internal and external returns to scale the caballero and lyons model is extended by disaggregation to the provincial level in order to measure the returns to scale of geographic provincial concentration the empirical results suggest that in canada there are increasing returns that are primarily national rather than internal to the province or the industry

corruption top down or bottom up this article studies the impact of corruption on an economy with a hierarchical government in particular we study whether centralizing corruption within the higher level of government increases or decreases the total amount of corruption we show that when the after tax relative profitability of the formal sector as compared to that of the informal sector is high enough adding a layer of government increases the total amount of corruption by contrast for high enough public wages and or an efficient monitoring technology of the bureaucratic system centralization of corruption at the top of the government hierarchy redistributes bribe income from the lower level to the upper level in the process total corruption is reduced and the formal sector of the economy expands

energy consumption practices of rural households in north china basic characteristics and potential for low carbon development reducing the climate impact of rural household energy consumption in china is complicated since it is bound up with deeply routinized daily practices and dependent from existing infrastructural systems of energy supply to assess the potential for low carbon development we first estimate the overall co2 emissions of rural households followed by a more in depth description and characterization of the different energy use practices within the households space heating turns out to be the largest emission source among domestic energy practices in north china we present lifestyle and context related factors that help to explain existing differences in domestic energy use practices of households the potential for low carbon development is discussed both at the demand side and the supply side at the demand side the use of more efficient technologies and cleaner energy sources for space heating seems to be a high potential measure for achieving low carbon households at the supply side the reduction of rural domestic co2 emissions could be effectively supported by making available to householders renewable and cleaner energy sources and technologies in order to be effective such low carbon energy options should take into account the income characteristics and lifestyles of rural householders

reassessing the energy ladder household energy use in maun botswana abstract in the context of sub saharan africa s rapid urbanization improved insight into urban energy use is increasingly important based on the predictions of energy transition theory a regional shift from biomass to modern fuels has long been expected to occur in tandem with urban growth however trends observed in the region s towns and cities have often not followed such patterns and fuelwood continues to be important in most areas this paper examines the practical relevance of transition theory using a recent case study conducted by the authors in maun botswana and results previously reported in the literature it finds that despite the long term link between socio economic development and increased modern fuel consumption at the national scale the notion of transition does not accurately reflect ongoing energy use patterns at lower levels of aggregation this is chiefly because its model of household fuel switching largely dismisses the importance of active and strategic decision making by urban consumers and their responsiveness to structural factors such as relative fuel prices as the botswana case illustrates this weakness can significantly distort expectations and policies around urban fuelwood use

notes on bribery and the control of corruption abstract existing models of corruption that allow for bribery have ignored an important recursive problem when an auditor or a policeman bargains over a bribe with a person he has arrested he has to take into account the fact that he may in turn be caught for taking this bribe and be involved in a similar bargain but from the other side the purpose of this paper is to provide a simple model for capturing this recursion having done so it goes on to analyse some conditions for the control of corruption these turn out to be different from what conventional wisdom suggests

variable returns to scale urban unemployment and welfare the proposition that free trade is superior to no trade has a classical ancestry adam smith and ricardo were amongst the first proponents of free trade samuelson 26 proved and it is held by economists today that free trade is the optimal policy in the presence of standard paretoconditions it is also generally agreed amongst economists that lower trade intervention is superior to higher trade intervention given competitive conditions in a small country these propositions do not hold however in the presence of factor market imperfections such as wage differentials in a small country and therefore production or wage subsidies improves social welfare the two models which are generally used to investigate the positive as well as normative aspects of trade theory in the presence of unemployment are the uniform real minimum wage model which is based on the assumption of general rigidity of real wage in one or two sectors of production and the sector specific minimum wage model which focuses on the phenomenon of rural urban migration in the face of large scale urban unemployment these two models are commonly utilized by trade theorists to analyze trade and unemployment specifically studies by haberler 13 johnson 16 batra and seth 3 findlay 12 and brecher 6 7 investigate the consequences of rigid factor prices for a small country whereas the normative as well as positive aspects of sector specific unemployment have been explored by harris and todaro 15 bhagwati and srinivasan 4 5 and more recently by batra and naqvi 2 das 10 and kahn 19 it has been correctly observed that the introduction of an exogenously specified real minimum wage among other things generates unorthodox results concerning unemployment and gains from trade a large body of research has also been concerned with the welfare implications of different commercial policies in the context of variable returns to scale kemp and negishi 20 have pointed out the beneficial effects of trade in the presence of variable returns to scale production subsidy and consumption taxes eaton and panagariya 11 have analyzed the question of gains from trade in the presence of variable returns to scale and in the context of pareto welfare criterion whereas choi and yu 8 have examined the welfare implications of tariffs and consumption taxes as well as the welfare rankings of these policies under variable returns to scale while panagariya and succar 25 have modified the necessary and sufficient conditions for stability under increasing returns to scale in urban sector

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

arresting the killer in the kitchen the promises and pitfalls of commercializing improved cookstoves summary in a shift exemplary of neoliberal approaches to development major funders of household energy interventions have begun to emphasize market based stove dissemination over partially subsidized models stove promoters are increasingly expected to operate as self sustaining businesses this shift is viewed as a way to scale up in order to reach millions of poor households lacking access to clean cooking technologies using the case of gira an ngo that has successfully distributed cookstoves in mexico s central highlands for nearly two decades we demonstrate how this trend presents challenges for organizations operating effectively with outside funding in highly contextual local conditions 2009 elsevier ltd all rights reserved

corruption and development a review of issues in this paper we start with a discussion of some of the different denotations of the problem of corruption we then consider the ways in which the damaging consequences of corruption operate in a developing economy while not ignoring its possible redeeming features in some cases we pursue the question of why corruption is perceptibly so different in different societies and also persistent finally we examine the feasible policy issues that arise in this context

factor immobility and gains from trade the implications of imperfect factor mobility have been studied by for example batra 1 ch 10 mussa 10 grossman 7 hill and mendez 8 and casas 4 among others this factorimmobility literature has generated many interesting results in the neo classical trade theory the issue of gains from trade has been studied by batra 1 ch 4 eaton and panagariya 6 choi and yu 5 and batra and naqvi 2 the implications of imperfect factor mobility for gains from trade remain by and large unexplored the main purpose of this paper is to explore the implications of factor immobility for several gains from trade and optimal policy issues a special feature of the present paper involves an endogenously determined wage differential arising from factor immobility however the wage distortion is not a genuine distortion as the social welfare depends upon workers locational preferences in addition to consumer demands the paper is developed as follows section ii describes the model and its assumptions section iii presents the analysis regarding the optimality of free trade free trade vs no trade and the optimal policies section iv shows the welfare effects of protection measures section v offers the concluding remarks

welfare effects of quotas under variable returns to scale recently there has been a growing use of quantitative restrictions on imports by countries for protecting their import competing industries it is well known that the quantitative restriction on imports set below the free trade level would result in higher domestic prices smaller quantities of importables available to consumers and hence a reduction in national real income thus import quotas similar to tariffs in a small economy reduce welfare this result has been derived in the traditional heckscher ohlin trade model with production functions subject to constant returns to scale crs while the assumption of crs greatly simplifies the analysis it is not easily justified in view of reality firms usually are exposed to various kinds of externalities which give rise to economies or diseconomies of scale

corruption competition and democracy abstract this paper presents a model of the interaction between corrupt government officials and industrial firms to show that corruption is antithetical to competition it is hypothesized that a government agent that controls access to a formal market has a self interest in demanding a bribe payment that serves to limit the number of firms this corrupt official will also be subject to a detection technology that is a function of the amount of the bribe payment and the number of firms that pay it under quite normal assumptions about the shape of the graph of the detection function multiple equilibria can arise where one equilibrium is characterized by high corruption and low competition and another is characterized by low corruption and high competition some suggestive empirical evidence is presented that supports the main hypothesis that competition and corruption are negatively related

resource policy investment and employment under variable returns to scale abstract this paper utilizes a generalized two sector model of a small open economy that features a binding real minimum wage specific factor and variable returns to scale the results presented indicate that capital accumulation increases total employment in the distorted economy and that all of the growth occurs in the sector that does not employ the specific factor however an increase in the availability of public land will increase total employment in the economy only when the sector that employs the specific factor is not capital intensive relative to the alternate sector

connective power solar electrification and social change in kenya summary market based rural electrification with solar energy is increasingly common in developing countries this article revolves around three main claims about solar electrification in kenya s unsubsidized market 1 the benefits of solar electrification are captured primarily by the rural middle class 2 solar electricity plays a modest role in supporting economically productive and education related activities but connective applications such as television radio and cellular telephone charging often receive a higher priority 3 solar electrification is more closely tied to increased television use the expansion of markets more rural urban communication and other processes that increase rural urban connectivity than to poverty alleviation sustainable development or the appropriate technology movement

comparison of energy transitions in the united states and developing and industrializing economies summary we compare the energy transitions of the united states with several developing and industrializing economies the analysis reveals three important differences between trends first the developing world experiences energy related transitions at lower levels of income with faster rates of change in conditions over time and in a more simultaneous fashion than that of the united states second over similar income ranges i e segments of economic growth current developing economies are using less energy per capita than the united states did historically finally this more efficient economic growth translates into lower systemic environmental impact per capita than that of the united states

an empirical analysis of household energy choice in ghana abstract using data from two recently available living standards surveys we trace the dynamics in cooking fuel choice among ghanaian households over the period 2005 6 and 2012 13 and further investigate the main forces driving households choice of a cooking fuel evidence from this paper reveals a significant transition from fuelwood use towards lpg over the period results further reveal factors such as price reliability in supply of lpg income and other household attributes as significant factors influencing households choice of a given energy type for cooking relevant policy prescriptions are offered to engender sustainable energy use and reduce over reliance on the already depleted forest resources for biomass energy

corruption and the composition of government expenditure abstract this paper asks whether predatory behavior by corrupt politicians distorts the composition of government expenditure corruption is found to reduce government spending on education in a cross section of countries

preferences for improved cook stoves evidence from rural villages in north india abstract because emissions from solid fuel burning in traditional stoves impact global climate change the regional environment and household health there is today real interest in improved cook stoves ics nonetheless surprisingly little is known about what households like about these energy products we report on preferences for biomass burning ics attributes in a large sample of 2120 rural households in north india a global hotspot for biomass fuel use and the damages that such use entails households have a strong baseline reliance and preference for traditional stoves a preference that outweighs the 10 and 5 willingness to pay wtp for realistic 33 reductions in smoke emissions and fuel needs on average respectively preferences for stove attributes are also highly varied and correlated with a number of household characteristics e g expenditures gender of household head patience and risk preferences these results suggest that households exhibit cautious interest in some aspects of ics but that widespread adoption is unlikely because many households appear to prefer traditional stoves over ics with similar characteristics the policy community must therefore support a reinvigorated supply chain with complementary infrastructure investments foster experimentation with products encourage continued applied research and knowledge generation and provide appropriate incentives to consumers if ics distribution is to be scaled up

urban fuelwood challenges and dilemmas abstract this paper explores the use of fuelwood in third world cities the importance of fuelwood and the factors which condition its use in cities are set out and three fuelwood problems are identified the cost to urban consumers fuel supply security and the impact of urban fuelwood markets on rural areas urban fuelwood interventions are evaluated with four categories identified interventions in marketing conservation increased wood production and fuel switching of these fuel switching by improved supply systems and increased production from smallholders and better management of natural woodlands appear to have the greatest potential the need for flexibility community participation in planning is stressed

immiserizing transfer under variable returns to scale this paper examines the welfare consequences of a unilateral transfer for both the transfer paying and the transfer receiving country in which the production functions are subject to variable returns to scale we obtain the conditions for the strong paradox that is the welfare of the transfer paying country improves and that of the transfer receiving country declines in the standard two country framework the conditions for the weak paradox that is both the transferor and transferee gain or lose simultaneously and the normal results that is the transferor loses and the transferee gains are also derived transferts appauvrissants quand les rendements a l echelle sont variables ce memoire examine les effets de bien etre d un transfert unilateral a la fois pour le pays donateur et le pays recipiendaire quand les fonctions de production ont des rendements variables a l echelle les auteurs d6veloppent les conditions qui sous tendent le paradoxe fort i e le cas oii le bien r ils d6rivent aussi les conditions qui sous tendent le paradoxe faible i e le cas oui les deux pays gagnent ou

property rights corruption and the allocation of talent a general equilibrium approach we consider an economy where contracts are necessary to encourage investments contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes we find that 1 it may be optimal to allow some corruption and not enforce property rights fully 2 less developed economies may choose lower levels of property right enforcement and more corruption 3 there may exist a free lunch such that over a certain range it is possible simultaneously to reduce corruption increase investment and achieve a better allocation of talent bureaucratic corruption is widespread in many societies casual empiricism and case studies suggest that corruption distorts the allocation of resources and discourages investment and the creation of new firms e g mydral 1968 desoto 1989 cross country studies also find that countries with high corruption or long bureaucratic delays suffer lower growth e g mauro 1996 sartre 1997 it is therefore tempting to conclude that government policies and bureaucratic corruption are at least partly responsible for the lack of development or slow growth of many economies e g shleifer and vishny 1993 nevertheless governments and bureaucracies do not exist only to seek rents they perform a number of useful functions including provision of public goods correction of market failures and redistribution without understanding why the state exists it is difficult to assess why corruption arises what its consequences are and whether and how it should be prevented in this paper we analyse how the employees of the state bureaucrats can misuse their power to enforce property rights the protection of property rights is commonly viewed as one of the most important roles of the state by political philosophers as diverse as david hume karl marx and robert nozick while a number of social scientists including north and thomas 1973 and rosenberg and bridzell 1989 emphasise the importance of secure property rights in the development of western societies for the state to have a role in enforcing property rights some contractual problems must exist between private parties in our economy these contractual problems are between entrepreneurs in particular production requires two agents and one of the entrepreneurs needs to undertake an investment but the returns accrue to the other one this can be thought as a partnership with the first agent as an upstream supplier providing an input of variable

fuel switching in slum and non slum households in urban india improving access to modern fuels is essential in developing countries for reducing adverse human health and environmental impacts caused by traditional fuels fuels use in developing countries is heterogeneous across households this paper estimates drivers of fuel switching in non slum and slum households in urban india using a discrete choice model on a nationally representative micro data the choices considered are three categories of cooking fuels traditional firewood dung crop residue and coal charcoal modern kerosene and liquefied petroleum gas lpg and mixed fuels the results suggest that the patterns of fuels use are consistent with the energy ladder theory in urban india in addition to income the major determinants of modern fuels uptake are fuels prices access to electricity and water supply and education attainment the increasing price of lpg affects the willingness to change fuels for low income non slum and the high income slum households negatively the analyses make a strong case for applying differential subsidies on modern fuels employing multidimensional aspects of poverty moreover there is a need for partial diversion of existing fuels subsidies on improving physical and social capitals which will result in uptake of modern fuels particularly among disadvantaged communities

woodfuels livelihoods and policy interventions changing perspectives in the 1970s it appeared that fuelwood use was growing rapidly and this could have major adverse impacts on the resource and poor users by the mid 1980s revised assessments indicated that there was less of a problem than had been foreseen and much less of a need for forestry interventions to maintain supplies as a result many of the latter were sharply scaled back additional information and analysis that has become available since the 1980s support the view that there is no need for large scale interventions devoted just to provision of fuelwood however declining access to supplies or markets can raise significant problems in some areas and for particular categories of user growing urban demand for charcoal can also cause local problems in particular in africa the potentials for appropriate forms of intervention are discussed

improved stoves in india a study of sustainable business models burning of biomass for cooking is associated with health problems and climate change impacts many previous efforts to disseminate improved stoves primarily by governments and ngos have not been successful based on interviews with 12 organizations selling improved biomass stoves we assess the results to date and future prospects of commercial stove operations in india specifically we consider how the ability of these businesses to achieve scale and become self sustaining has been influenced by six elements of their respective business models design customers targeted financing marketing channel strategy and organizational characteristics the two companies with the most stoves in the field shared in common generous enterprise financing a sophisticated approach to developing a sales channel and many person years of management experience in marketing and operations and yet the financial sustainability of improved stove sales to households remains far from assured the only company in our sample with demonstrated profitability is a family owned business selling to commercial rather than household customers the stove sales leader is itself now turning to the commercial segment to maintain flagging cash flow casting doubt on the likelihood of large positive impacts on health from sales to households in the near term

nigeria s household energy sector issues and supply demand frontiers abstract this paper deals with the energy situation in the household sector of the nigerian economy a review of the pattern of energy consumption in 1989 elucidates several critical characteristics of the sector the sector accounts for about 65 of total final energy consumption in the country in 1989 with fuelwood providing about 81 four cardinal issues to be addressed in the sector are highlighted the paper also presents the result of a useful energy demand forecast for the sector over the period 1989 2014 which shows that useful energy requirements will grow rapidly as a result of both economic and population growth this is then used in an approach of supply demand balancing to establish supply frontiers for final energy carriers under three scenarios finally the issues in the sector are examined against the background of the results of the analysis

public beliefs and corruption in a repeated psychological game abstract this paper investigates the role of guilt aversion for corruption in public administration corruption is modeled as the outcome of a game played between a bureaucrat a lobby and the public there is a moral cost of corruption for the bureaucrat who is averse to letting the public down we study how the behavior of the lobby and the bureaucrat depend on perceived public beliefs when these are constant and when they are allowed to vary over time with time varying beliefs corruption is more likely when the horizon of the game is relatively long and when public beliefs are initially low and are updated fast

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

the market for public office why the indian state is not better at development abstract how and why officials are transferred from one post to another can in india does have far reaching consequences for the effectiveness of public service organizations such as irrigation agriculture forestry and soil conservation departments the transfer mechanism used in many departments of indian states involves a kind of internal labor market a truer market than in the way that term is often used by labor market economists it allows pressures for corrupt behavior to bear down on the incumbents of certain posts and itself amplifies those pressures frequently the pressures on officials to be corrupt cause them to behave in ways contrary to the ostensible objectives of their departments why is the indian state not better at promoting development to an important degree because of the corruption transfer mechanism and its effects on bureaucratic initiatives

nontraded goods variable returns to scale and welfare the implications of variable returns to scale vrs for the theory of international trade have been extensively studied by trade theorists 5 7 8 11 14 it is however notable that no attempt has been made to ascertain the role of vrs in conjunction with nontraded goods some of the major trade theorems have been examined by komiya 12 in an extended heckscher ohlin samuelson h o s model with a nontraded good despite its pioneering contribution komiya s analysis is confined to the production side of a small open economy more recently batra 2 has investigated the welfare effects of several trade policies in a nontraded goods model by incorporating the presence of factor market distortions the purpose of this paper is to explore the welfare implications of a change in the terms of trade and the rate of tariff as well as the relative effectiveness of some trade policy instruments in the three commodity two traded and one nontraded and two factor trade model allowing the presence of vrs the issue is important for two reasons first the existence of nontraded goods is an indisputable phenomenon characterizing the real world second to the extent that vrs have impacts on commercial policy its implication in the presence of nontraded goods must be thoroughly examined several significant results are obtained from this analysis for example free trade may turn out to be the first best policy optimum optimorum even when returns to scale are divergent among industries when the industries in an economy operate under identical returns to scale with constant returns to scale crs as a special case an improvement in the terms of trade necessarily enhances welfare but a higher rate of tariff may not result in a lower welfare unlike the result derived by bhagwati 3 from the standard two commodity h o s model with production externalities a consumption subsidy tax rather than a production tax cum subsidy may turn out to be the optimum optimorum in our nontraded good model this occurs specifically when vrs distortions exist in the nontraded good industry only under divergent returns to scale among industries the output elasticities of