political freedom and the response to economic incentives labor migration in africa 1972 1987 abstract policy reforms in developing countries often address in isolation either an economic or a political problem this study examines the interaction between political institutions and responses of labor migration to economic incentives migration data from thirty two african countries were used to quantify the statistical relationships between political institutions and labor migration out of agriculture regression results indicate that the presence of political freedoms and civil liberties increases the responsiveness of labor migration to economic incentives

religion corruption and the rule of law in a 207 country sample we find that rule of law and corruption are both associated with a country s religious heritage thereby partially explaining the correlation between religion and economic growth found in previous research we also show that our results change when we control for some variables lacking data for all countries in the sample but that these differences are attributable to changes in sample composition rather than the effects of the control variables our research suggests that researchers doing cross country analysis should distinguish between the effects of adding a control variable and the resulting sample composition effects

institutions and the environmental kuznets curve for deforestation a crosscountry analysis for latin america africa and asia abstract the relationship between deforestation and income across 66 countries of latin america africa and asia is examined institutional characteristics as well as macroeconomic policies of each country are hypothesized to impact deforestation results show strong evidence of an environmental kuznets curve ekc relationship between income and deforestation for all three continents institutional structure and macroeconomic policy significantly affect the tropical deforestation process improvements in political institutions and governance significantly reduce deforestation the factors leading to deforestation differ across regions however and there is no one size fits all global policy recommendation for restraining the tropical deforestation process

optimal production lot with imperfect production process under permissible delay in payments and complete backlogging abstract the traditional economic production quantity epq model assumes that the production products are all perfect it is not always true in the real production system due to imperfect production process or other factors imperfect quality items may be produced furthermore it is well known that the total production inventory costs can be reduced by reworking the imperfect quality items produced with a relatively smaller additional reworking and holding costs in addition the permissible delay in payments offered by the supplier is widely adopted in the practical business market in this study we explore the effects of the reworking imperfect quality items and trade credit on the epq model with imperfect production processes and complete backlogging a mathematical model which includes the reworking and shortage costs interest earned and interest charged is presented besides an arithmetic geometric mean inequality approach is employed and an algorithm is developed to find the optimal production policy furthermore some numerical examples and sensitivity analysis are provided to demonstrate the proposed model

economic growth and institutions some sensitivity analyses 1961 2000 do institutions help explain macroeconomic performance this article addresses two issues first especially given the practical implications of the literature measurement of institutions should avoid tautologies and therefore this study uses econometrics to estimate the effect of objectively measurable institutions such as labor market organization financial development fiscal federalism and political regime type second the growing literature on these promising factors in turn is unfortunately incommensurable because previous studies fail to control for other institutional and in some cases standard economic variables given data on up to ninety four countries from 1961 through 2000 extreme bound analysis eba an econometric technique that addresses the sensitivity of previous findings to alternative assumptions about model specification suggests that some institutions associated with the organization of labor and capital are robust correlates of investment few data support the view that variables related to the organization of the state including fiscal federalism and political regime type affect macroeconomic performance without implication the author thanks richard nelson doug chalmers robert shapiro alessandra casella brendan o flaherty geoffrey garrett alexander hicks brett hammond mark kesselman the editor lisa martin and two anonymous referees for helpful comments also ross levine peter rousseau geoffrey garrett and torben iversen were very helpful in locating data the views expressed in this article do not necessarily reflect those of the board of governors of the federal reserve system or any member of its staff

the rule of law and economic growth where are we summary it is widely assumed that the rule of law is essential for economic growth however the rule of law is clearly a multidimensional concept encompassing a variety of discrete components from security of person and property rights to checks on government and control of corruption we review the theory underlying these different causal mechanisms linking the rule of law to economic growth and provide an introduction to some outstanding measurement issues we find that the correlation among different components of the rule of law concept are not tight among developing countries and that some inferences about the effects of property rights protection may not be warranted

an ordinal ranking of economic institutions abstractwe provide the first ranking of countries economic institutions using an ordinal methodology using the five areas of the fraser institute s economic freedom of the world efw index we find that final rankings of a country s institutions are sensitive to the importance ordering of area 1 size of government when areas 2 5 are in the most important position we find that there is no significant difference between the efw rankings and our rankings when area 1 is placed in the most important position however a number of european countries with large welfare states but good governance do poorly

the two freedoms economic growth and development an empirical study log linear methods are applied to categorical data containing economic freedom political freedom the level of income and the rate of economic growth for a panel of about 100 countries from 1975 to 1992 the main results are given economic freedom the rate of economic growth is independent of political freedom and the level of income given the level of income political freedom is independent of economic freedom and the growth rate the analysis suggests the fundamental effects of economic freedom in fostering economic growth and a high level of income as the condition of a high degree of political freedom

the choice to cash out pension rights at job change or retirement abstract most pension plans allow a lump sum distribution upon job separation enabling a subsequent cash out in the 1992 2000 hrs 13 of entitlements were cashed out representing 5 3 of entitlement dollars among plans with a lump sum option 20 were cashed out cash outs can be rational and we broadly confirm hypotheses for cash out determinants but not that individuals with short expected longevity should wish to disproportionately cash out fears of adverse selection into the pool of pensioners with annuity income thus appear unfounded while we find only limited leakage it is concentrated among individuals vulnerable to poverty in old age

measuring economic freedom an alternative functional specification and subsequent ranking abstractthe widely cited economic freedom of the world index is an aggregate measure of economic freedom calculated by using a simple arithmetic mean of scores over five sub dimensions 1 size of

how deep is the annuity market participation puzzle using microeconomic data for the united kingdom we analyze the empirical determinants of voluntary annuity market demand we find that annuity market participation increases with financial wealth life expectancy and education and decreases with other pension income and a possible bequest motive for surviving spouses we then show that these empirically motivated determinants of annuity market participation have the same quantitatively important effects in a life cycle model of annuity and life insurance demand saving and portfolio choice moreover reasonable preference parameters predict annuity demand levels comparable to the data for stockholders a strong bequest motive can simultaneously generate balanced portfolios and low annuity demand

railway development from the japanese occupation period to the present using kaohsiung city as an example abstractthis study intended to discuss the interactive influence of the emergence transformation and decline of the railway in kaohsiung port on urban development the population the activities and the economy in the region during the period of 1895 2010 from the perspectives of urban planning railway development population and industry this study used the crossover analysis method and used the factors of railway development and urban planning within a fixed time period to explore the chain dependence relationship among the industry the population the regional economy and the railway stations in kaohsiung city this study found that urban planning economic development railway development and industry have an interactive influence on the overall urban development urban planning promotes the rapid growth of the population and economic development propels the growth and shaping of the regional economy thus increasing employment opportunities in addition the railway development process moves

the choice between an annuity and a lump sum results from swiss pension funds this paper uses unique micro data from swiss employer based pension plans to study the annuitization decision at retirement the administrative nature of our data though limited with respect to individual background characteristics allows us to analyze real choices over large retirement balances rather than subjectively reported intentions to annuitize we find a strong and robust impact of a utility based measure of the annuity s value computed within a life cycle framework on individual annuitization rates low accumulation of retirement assets is strongly associated with the choice of the lump sum presumably due to the availability of means tested social assistance the sponsor s default option in most cases the annuity is also found to be highly influential in the decision to annuitize

selection effects in the united kingdom individual annuities market this paper explores adverse selection in the voluntary and compulsory individual annuity markets in the united kingdom two empirical regularities support standard models of adverse selection first annuitants are longer lived than non annuitants these mortality differences are more pronounced in the voluntary than in the compulsory annuity market we estimate that the amount of adverse selection in the compulsory market is about one half of that in the voluntary market second the pricing of different types of annuity products within each annuity market is consistent with individuals selecting products based in part on private information about their mortality prospects the aging of populations in many developed nations has generated substantial interest in the way households finance consumption in their retirement years annuities insurance products that provide a payment stream for as long as the insured individual is alive offer one way to spread an accumulated stock of resources over a retirement period of uncertain length theoretical research beginning with yaari 1965 suggests substantial utility gains from annuitisation in the presence of stochastic length of life public policy discussions have also generated substantial current interest in the operation of annuity markets the decline in long term interest rates in the united kingdom since the early 1990s has coincided with a decline in annuity payouts relative to annuity premia this has sparked a debate

freedom and international migration economic and political freedoms are regressed on a bilateral cross section of international migrant stocks using ordinary least squares and tobit techniques a positive relationship between these variables is found economic freedom is statistically significant even when controlling for income per capita and political freedom in addition the impact of these freedoms on migration flows into oecd countries between 2001 and 2006 using fixed effects estimations is analyzed the panel data analysis mostly corroborates the cross sectional analysis the notable exception is that political freedom appears to have had a negative impact on migration flows during this period

the adoption of new technology by the farmers in taiwan this study addresses the technologies the farmers adopted their reasons for adopting these technologies and the result of adopting these technologies the design and strategy used to collect the data needed are both qualitative and quantitative farmers who practised traditional farming methods and those who adopted the new technologies were both given survey questionnaires and were interviewed the result of the study shows that the technologies applied by the farmers are the use of tractors in tilling the ground the use of machinery in planting the practice of irrigation and the use of a combination of organic and commercial fertilizers the reasons for the adoption of the latter are the availability of chemicals and the convenience of their use and this is used to enhance the growth of plants the results of the new technology adoption are high yields of produce production of hybrid crops and the saving of labour thus increasing the income of the farmers

international structural adjustment and its sectoral and spatial impacts structural economic adjustment has relevance and significance in oecd countries among the countries in transition from socialism to capitalism and in the developing countries of asia africa and latin america its impacts are multi institutional being in firms government agencies non government organisations and households institutions are having to innovate to adapt and to reorganise to meet rapidly changing economic conditions in an increasingly competitive environment this article evaluates the structural adjustment process it will establish general principles for interpretation and for a newly emerging dominant political economy the new political economy npe in which adjustment is being articulated the npe is evolving being influenced by the post 1990 enhanced relevance of social and environmental issues adding to the neoliberalism characteristics of the early origins of the npe also the npe is being infused with intellectual institutionalism especially the new institutional econom

new evidence on the relationship between democracy and economic growth it is often maintained that democracy is a luxury which comes at a price in terms of subsequent slower increases in national living standards however various recent cross section studies on economic growth have found evidence that lack of civil and political liberties is negatively correlated with economic growth using a new measure of democracy which is based upon the number of years that a country can be regarded as a democracy the robustness of this relationship is examined both direct and indirect effects of lack of democratic liberties are analysed our main conclusion is that the relationship between democracy and economic growth is not rubust

rent seeking bureaucracies and oversight in a simple growth model abstract following recent cross country empirical work research on public policy and growth has come to examine the impact of inefficient or corrupt bureaucracies most of this work has emphasized the interactions of bureaucracies with private markets by contrast this paper focuses on the relationship between rent seeking bureaucracies and their political authority we show that when oversight is relatively costly as in many developing economies the political authority exercises little monitoring of its agencies which reduces the effectiveness of productive government spending moreover when the technology used to provide public services is poor bureaus better succeed in requesting overly large budgets before triggering any monitoring both of these characteristics contribute to reducing the growth rate of already poor economies

inward looking policies institutions autocrats and economic growth in latin america an empirical exploration this paper explores the institutionaldeterminants of economic growth in latinamerica by taking advantage of recentempirical research that employs subjectiveand objective measures to test for apossible northian explanation that linksinstitutional quality and economic growth we explore a simple framework that may helpbetter understand the policymakers choicesand persistence regarding inward lookingpolicies that were pursued between the1930s and the 1980s by arguing that in thelatin american case olson s 1982 idea ofencompassing interest should be expanded tocover not only the economic stakes of powerholders but in particular their psychicincome which includes their politicalstakes along the lines of recent work byrobinson 1997 coyne 2002 andothers

further evidence on the relationship between economic freedom and economic growth often it is maintained that economic freedom may further high levels of economic growth using various measures of economic freedom constructed by scully and slottje the robustness of this relationship is examined both direct and indirect effects of lack of liberties are analysed our main conclusion is that the link between economic freedom and economic growth depends upon the measure used for some indicators of economic freedom there appears a robust direct relationship while for others there is no such relationship investment is not related to our indicators for economic freedom

the informal sector elephant abstract different analysts have used the term informal sector to mean different things a data set with 2 200 small enterprises chosen using random procedures in seven countries makes it possible to test the relationships between different measures the analysis finds only limited parallels between definitions based on size on registration on conformity to fiscal and other regulations and on degrees of modernization wide variations appear from one country to another the term may be appropriate for examination of individual countries especially if the analyst defines it precisely but its use in multicountry analysis is fraught with difficulties

the size of the state economic growth and the efficient utilization of national resources the motives of the state in projecting a more than minimal presence in the economy may be conceived of as benevolent or malevolent whatever the characterization of the motivation increases in the size of the government share of the economy adversely affect economic growth and the allocation of resources nations with relatively large government shares in 1960 on the whole grew more slowly than nations with relatively small state sectors interperiod increases in the size of government were associated with lower growth rates over the period the size of the government share coefficients in the regressions were of sufficiently large magnitude to conclude that the rise in the size of the government has had a substantial depressing effect on economic growth these results are consistent with those reported by landau 1983 and marlow 1986 landau did not adjust economic growth for the growth in factor endowment consequently his results overstate the adverse effect of government size

cultural and institutional determinants of economic growth a cross section analysis economic growth rates for the period 1968 1987 are analyzed for ninety countries culture political and economic arrangements and personal freedoms are statistically significant determinants of growth personal freedom is shown to be a normal good whose demand might be affected by cultural influences democracies raise personal freedoms ceteris paribus and consequently grow more quickly than non democratic regimes evidence is found for the convergence hypothesis other things equal lower income countries grow more rapidly than higher income countries

optimal lot sizing integration policy under learning and rework effects in a manufacturer retailer chain abstract most research in economic manufacturing order quantity management assumes that all products are of perfect quality and are produced at a constant production rate one result of this assumption is that the number of units produced in a given period is constant which is not the case in real life most production systems produce items which are of perfect quality along with some that are of imperfect quality defective items as well as the learning effect affect production and inventory costs thereby shaping the performance of the manufacturer retailer chain the present study uses the nash stackelberg and cooperation games to model an imperfect production system to investigate the combined effects of lot sizing size integration the learning effect imperfect production and the rework process on a manufacturer retailer channel this study also demonstrates the optimal properties of the proposed models develops a search algorithm for obtaining optimal solutions and conducts a numerical study to seek structural and quantitative insights into the structure of the proposed models in addition it analyzes the sensitivity of the solutions in relation to the major parameters

how strong are bequest motives evidence based on estimates of the demand for life insurance and annuities this paper presents new empirical evidence in support of the view that a significant fraction of total saving is motivated by the desire to leave bequests specifically i find that social security annuity benefits significantly raise life insurance holdings and depress private annuity holdings among elderly individuals these patterns indicate that the typical household would choose to maintain a positive fraction of its resources in bequeathable forms even if insurance markets were perfect evidence on the relationship between insurance purchases and total resources reinforces this conclusion

rights equity and economic efficiency the adelman morris premise that economic development and equity are incompatible is not supported by the evidence of a strong relationship between equality of rights and the income distribution the premise that equity requires the denial of individual rights and the affirmation of state control is an oxymoron what has been overlooked in the literature on growth and equity is the effect of the rights structure on both economic efficiency and on the income distribution the evidence is that free societies have much larger shares of income going to the middle 60 percent of the distribution than is observed in societies where men are not free to choose in politically open societies compared to politically closed regimes the share of income to the middle three quintiles is q2 10 7 vs 8 0 q3 16 0 vs 11 5 and q4 22 9 vs 17 9 in the aggregate the shares to the middle quintiles are 49 6 vs 37 4 in nations that obey the rule of law compared to regimes in which the rights of the state relative to the individual are paramount the comparisons are q2 11 2 vs 7 4 q3 16 3 vs 10 6 q4 23 0 vs 17 3 summing the three quintiles yields a comparison of 50 5 vs 35 3 in countries that have private property market allocation of resources and minimum intervention by the state compared to command economies the shares of income to the middle quintiles are q2 10 8 vs 8 0 q3 16 0 vs 11 1 and q4 22 8 vs 17 7 aggregated the shares of the middle class in regimes with high levels of economic liberty are 49 6 vs 36 8 for regimes with restricted private economic rights

rule and policy spaces and economic progress lessons for third world countries despite greater rates of capital accumulation per capita growth rates among third world nations particularly africa are much lower than among the advanced capitalist nations in this paper i examine the critical roles of the rule space and policy on economic growth empirically nations with poor institutions and policies grow at about a fifth of the rate of nations with good institutions and policies

political regimes and economic growth arguments that relate regimes to growth focus on property rights pressures for immediate consumption and the autonomy of dictators while everyone seems to agree that secure property rights foster growth it is controversial whether democracies or dictatorships better secure these rights the main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption which reduces investment only states that are institutionally insulated from such pressures can resist them and democratic states are not the main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output these views are summarized in turn

economic freedom government policy and the trade off between equity and economic growth this study investigates the role that economicfreedom plays in economic growth and in the distribution in marketincome the role of government policy in advancingeconomic progress and in promoting income equality and the effectthat the rate of economic progress has on thedistribution of market income structural and reduced formmodels are estimated that reveal that economic freedompromotes both economic growth and equity and that there is apositive but relatively small trade off between growth andincome inequality

the institutional framework and economic development the compound growth rates of per capita output and farrell type efficiency measures for 115 market economies over the period 1960 80 were compared with measures of political civil and economic liberty it was found that the institutional framework has significant and large effects on the efficiency and growth rate of economies politically open societies which subscribe to the rule of law to private property and to the market allocation of resources grow at three times the rate and are two and one half times as efficient as societies in which these freedoms are abridged

the political economy of public research investment and commodity policies in agriculture an empirical study the paper tests a political economy theory of simultaneous government decision making on income redistribution through commodity policies and on public research investment in agriculture we use data from 37 countries on agricultural protection and public agricultural research expenditures pari the empirical results are consistent with the political economy hypotheses the analysis suggest that structural changes in the economy have important effects on the political incentives for governments not only to subsidize or tax farmers but also to invest in public agricultural research furthermore the analysis supports the hypotheses that the impact of such structural changes on government decision making on pari is non linear and conditional on other factors regarding the impact of political institutions the results suggest that more democracy neither leads to more distortionary transfers agricultural protection nor to lower investment in public goods pari

adverse selection in insurance markets policyholder evidence from the u k annuity market in this paper we investigate the importance of adverse selection in insurance markets we use a unique data set consisting of all annuity policies sold by a large u k insurance company since the early 1980s to analyze mortality differences among individuals who purchased different types of policies we find systematic relationships between ex post mortality and annuity policy characteristics such as whether the annuity will make payments to the estate in the event of an untimely death and whether the payments from the annuity rise over time these mortality patterns are consistent with the presence of asymmetric information in the annuity market we find no evidence of substantive mortality differences however across annuities of different size even though models of insurance market equilibrium with asymmetric information would predict such differences we also find that the pricing of various features of annuity contracts is consistent with the self selection patterns we find in mortality rates our results therefore suggest that selection may occur across many specific features of insurance contracts and that the absence of selection on one contract dimension does not preclude its presence on others this highlights the importance of considering the detailed features of insurance contracts when testing theoretical models of asymmetric information

property rights vs redistribution which path to national wealth recent empirical and theoretical research suggests that egalitarian income distribution may spur economic growth another different strand of research suggests that property rights are important these two results are not at odds a model of switching between a career of rent seeking and wealth producing shows that for redistribution to boost national income property rights need to be secure a more equal distribution of earned income can induce rent seekers to switch to wealth making but only if they can be assured that their earned income will be protected from other rent seekers the model suggests new directions for empirical testing

annuities and individual welfare advancing annuity demand theory we present suffcient conditions for the optimality of full annuitization under market completeness that are substantially less restrictive than those used by yaari 1965 we examine demand with market incompleteness finding that positive annuitization remains optimal widely but complete annuitization does not how uninsured medical expenses affect demand for illiquid annuities depends critically on the timing of the risk a new set of calculations with optimal consumption trajectories very different from available annuity income streams still shows a preference for considerable annuitization suggesting that limited annuity purchases are plausibly due to psychological or behavioral biases

how robust is the relationship between economic freedom and economic growth using various indicators for economic freedom it is shown that increases in economic freedom are robustly related to economic growth this conclusion holds even if the impact of outlying observations is taken into account the level of economic freedom is not related to growth

the effects of economic freedom regulatory quality and taxation on the level of per capita real income a preliminary analysis for oecd nations and non g8 oecd nations this study of the impact of economic freedom regulatory quality and the relative burden of taxation on the level of per capita real income gdp among oecd nations over the period 2003 to 2007 adopts a modified version of the overall economic freedom index computed by the heritage foundation 2013 one with the fiscal freedom and business freedom indices removed this study then provides panel least squares fixed effects estimates for five linear specifications models each nation during this time frame can be regarded either as a nation per se or as a de facto economic region within the oecd the analysis first focuses upon all of the oecd nations and then as a robustness test subsequently focuses only on non g8 oecd member nations the estimations in this study all provide strong empirical support for the three central hypotheses proffered here namely 1 the higher the overall degree of economic freedom the higher the per capita real income gdp level 2 the higher the level of regulatory qua

governance structures and the durability of economic reforms evidence from inflation stabilizations abstract this paper investigates the relationship between a country s political economic and institutional environment and its ability to implement sustainable economic reform programs the policy issue on which the study focuses is inflation stabilization it consists principally of econometric estimations of the relationship between the success of stabilizations in a large sample of countries and several political and economic explanatory variables the hypotheses tested are drawn both from the recent macroeconomic literature on policy credibility and from political science the major findings include the following 1 a despite the conventional wisdom to the contrary political repression does not appear to be an effective means for implementing sustainable stabilization policies durable economic reforms and political freedoms appear to be complementary 2 b as has been previously argued theoretically and demonstrated empirically political instability is detrimental to policy reform 3 c the political will and popular consensus for stabilization policies are enhanced during a severe economic crisis 4 d there is weak evidence that intervention by the international monetary fund rather than supporting reform programs can undermine their credibility

endogenous economic freedom and the wealth of nations evidence from a panel of countries 1996 2011 indexes of economic freedom measure the degree to which the policies and institutions of countries are supportive of economic freedom the authors find a considerable scope for improvement in index of economic freedom created by heritage foundation since not all components of index have equal effect on economic well being contrary to heritage methodology the authors tackle the aggregation bias and highlight that each index component contributes differently to the level of economic freedom and subsequently to the level of income per capita the level of fiscal freedom and monetary freedom exert the strongest influence on the overall index of economic freedom authors present the new endogenous cross country ranking of 135 countries from instrumental variable two stage least squares iv 2sls empirical specification which removes the inconsistencies arising from the arbitrary assumption of the equivalent effect of each component on the overall index and hence the level of real income per capita

optimality of zero inventory policies for unreliable manufacturing systems we show that there are ranges of parameter values describing an unreliable manufacturing system for which zero inventory policies are exactly optimal even when there is uncertainty in manufacturing capacity this result may be initially surprising since it runs counter to the argument that inventories are buffers against uncertainty and therefore one must strive to maintain a strictly positive inventory as long as there is any uncertainty however there is a deeper reason why this argument does not hold and why a zero inventory policy can be optimal even in the presence of uncertainty this provable optimality reinforces the case for zero inventory policies which is currently made on the separate grounds that it enforces a healthy discipline on the entire manufacturing process

political freedom economic freedom and income convergence do stages of economic development matter in the literature theory and empirical evidence on the nexus of political freedom economic freedom and economic growth are mixed in this paper we test the hypothesis that the effect of political freedom on promoting economic growth is realized and detectable at later stages of social and economic development using panel data for a sample of 104 countries between 1970 and 2003 we find strong support for our hypothesis while economic freedom has greater effects on income convergence in the oecd countries political freedom clearly promotes the convergence among those oecd countries

how much does annuity demand react to a large price change in this paper we present new evidence for the effect of changes in annuity prices on the decision to annuitize we exploit an unprecedented change in policy in several swiss occupational pension plans there is an implied 8 percent reduction in the rate at which retirement capital is translated into an annuity and this represents a net present value loss of chf 18 500 around us 20 000 to estimate the impact of this change we use data from companies that changed their prices and from one large company that did not we find that the price change reduces the propensity to annuitize among affected individuals by 16 8 percentage points

optimal lot sizing in an imperfect production system with homogeneous reworkable jobs abstract we consider a lot sizing problem in a single stage imperfect production system where the job processing is failure prone the processing may generate two types of defects 1 reworkable defects which must be sent back for rework 2 nonreworkable defects which are discarded immediately the production process will switch between new jobs and rework jobs both new job processing time and rework time are random we discuss the optimal lot sizing control under a class of operating policies to maximize the average profit over an infinite time horizon we establish the existence of an optimal lot size furthermore we characterize the profit function through the discussion we obtain a very efficient algorithm for determining an optimal lot size

institutional framework and economic development international evidence this paper examines the effect of quality of the institutional framework on economic development our empirical results support the hypothesis that good institutions improve efficiency and accelerate growth the positive effect of institutional quality is more pronounced with mutually reinforcing support of economic freedom our results also indicate that good institutions help developing countries grow faster to achieve conditional convergence we infer from the results that economic development requires not only physical and human capital formation but also freedom to choose and institutional support

the cost of annuities implications for saving behavior and bequests the fact that most elderly u s individuals maintain a flat age wealth profile rather than buy individual life annuities contradicts the standard life cycle consumption model average expected yields on individual life annuities in the united states during 1968 1983 were lower by 4 21 6 13 percent or 2 43 4 35 percent after allowing for adverse selection than yields on plausible alternative investments simulations of a model of saving and portfolio allocation show that during the early retirement years such yield differentials can account for the absence of annuity purchases even without a bequest motive at older ages the combination of such yield differentials and a bequest motive can do so it is common experience that as we grow older and nearer to eternity we become more not less anxious about money derek brewer chaucer and his world p 213

democracy and development a theoretical framework a simple framework is set up to discuss the relationship between democracy material welfare and development democracy is regarded both as a good in its own right and as an input in the production of material welfare the optimum level of democracy is then related to the level of development at the optimum point the marginal cost of democracy in terms of foregone output is positive and growth is a decreasing function of the level of democracy deviations from the optimum path are described as either repressive or populist democratization is not unambiguously an optimal response to exogenous shocks

political systems and distortions an empirical study this paper studies empirically why price distortions are more prevalent in some countries than in others we find no significant difference between democracies and dictatorships but frequent regime changes reduce distortions political systems factional subordinate that encourage redistributive activities rda tend to have more distortions allowing for different effects of rda in democracies and dictatorships there is a positive and significant effect of rda on distortions in dictatorships in democracies distortions destroying lobbying seems more important since no significant relation between rda and distortions can be found

demand for annuities price sensitivity risk perceptions and knowledge abstract the demand for voluntary individual lifetime annuities is low as merely 10 of soon to be retired canadians care to buy such contracts to assess the reasons why we design a stated preference experiment in which we vary characteristics of annuity contracts to estimate individuals sensitivity to an annuity s money s worth that is the value to cost ratio using different measures of longevity risk and survival expectations we investigate how knowledge of annuity products and mortality risk misperceptions affect the take up and the sensitivity of the demand for annuities we find that annuities are objectively actuarially neutral in general meaning that annuity premiums are equal to their expected payment and can appear to offer great value for the money given an individual s subjective mortality risk we also find that demand is somewhat price inelastic so that lowering the price of annuities could increase demand by at most 2 percentage points for a base of 10 lack of knowledge of annuities explains another 0 8 percentage points we find limited additional interest for deferred annuities compared to immediate annuities although respondents are less sensitive to deferred annuity prices

economic freedom and growth decomposing the effects most studies of the relation between economic freedom andgrowth of gdp have found a positive relation one problem inthis area is the choice of economic freedom measure a singlemeasure does not reflect the complex economic environment anda highly aggregated index makes it difficult to draw policyconclusions in this paper we investigate what specific typesof economic freedom measures that are important for growth the robustness of the results is carefully analysed since thepotential problem with multicollinearity is one of thenegative effects of decomposing an index the results showthat economic freedom does matter for growth this does notmean that increasing economic freedom defined in generalterms is good for economic growth since some of thecategories in the index are insignificant and some of thesignificant variables have negative effects

democracy property rights and economic growth what does the global surge in democracy and capitalism portend for economic growth the shift toward popular government is predicted by some to accelerate growth by others to retard it often left out of the equation is property rights as a factor distinct from democratic rule using recent data on 59 less developed and transitional countries this article explores the relationship among institutional factors and growth in the 1980s and early 1990s democratic freedoms and property rights are associated with the dependent variable suggesting that national income in poor countries stands to gain from recent efforts to implant these institutions

private pensions mortality risk and the decision to annuitize abstract this paper examines household decisions about whether or not to annuitize retirement resources a life cycle model of consumption implemented with the use of dynamic programming techniques is used to construct a utility based measure of annuity value for individuals and couples in the health and retirement survey variation in the calculated annuity equivalent wealth arises from differences in mortality risk marital status risk aversion and the presence of pre existing annuities such as social security i find that a one percentage point increase in the annuity equivalent wealth leads to nearly a one percentage point increase in the ex ante probability of annuitizing balances in defined contribution pension plans however because much of the variation in the expected annuity decision is left unexplained by the life cycle model other factors are also analyzed health status and an individual s time horizon for financial decision making are significant determinants of the decision there is no evidence that bequest motives are an important factor in making marginal annuity decisions

natural resources and the tradeoff between authoritarianism and development abstract why do african and middle eastern countries seem cursed by an abundance of natural resources yet usa australia and norway seem blessed a growing literature has argued that the benevolence or malignance of natural resources depends upon the quality of institutions this paper offers a new explanation based on associational freedom and its interaction with the political system the model predicts that natural resources have an adverse impact on economic performance and transition to democracy in authoritarian regimes but not in democracies it also predicts that repression of associational freedom will be increasing in natural resources in authoritarian regimes i test the model s predictions using fixed effects regressions on an international panel from 1975 to 2000 and find support

institutions freedom and technical efficiency the impact of institutions on economic performance is currently the subject of much research in this study we use panel data to estimate a stochastic production frontier and the sources of inefficiency for a broad set of countries a maximum likelihood procedure is used to estimate the parameters for the stochastic production frontier and the determinants of inefficiency simultaneously our results show that institutions that promote greater economic freedom in turn promote efficiency

democracy rent seeking public spending and growth abstract does democratization imply faster growth less corruption and less inefficiency past studies yield ambiguous results on the effects of democracy on economic performance and growth we develop a simple two sector endogenous growth model that shows both very young and mature democracies grow faster than countries in mid stages of democratization producing a u effect this effect results from the pattern of rent seeking as it diverts from the provision of public goods rent seekers act as monopolistic competitors initially more democracy increases their number raising aggregate rents however rents per rent seeker fall with the number of rent seekers due to this crowding effect and the increased competition among rent seekers aggregate rents fall in mature democracies thus rents show an inverted u effect in relation to democracy we find fairly robust supportive evidence for the latter

new evidence on the money s worth of individual annuities this paper presents new information on the expected present discounted value of payouts on individual life annuities the annuity we examine is the single premium immediate life annuity an insurance product that pays out a nominal level sum as long as the covered person lives in exchange for an initial lump sum premium this annuity offers protection against the risk of someone outliving his saving given uncertainty about longevity for reasonable estimates of behavioral parameters we calculate that individual annuities are currently priced so that retirees without bequest motives should find these policies of substantial value in configuring their portfolios to smooth retirement consumption we also find that the expected present discounted value of payouts relative to the initial cost of the annuity has increased over the last decade these findings bear on the policy debate regarding the role of individual choice and self reliance in retirement planning this abstract was borrowed from another version of this item

why not africa growth and welfare effects of secure property rights this paper presents the long run equilibrium and developmentdynamics in the neoclassical growth model and a simple modelof endogenous growth when property rights are absent theresults are compared to the outcome in a corresponding modelwith secure property rights the main findings are that thereexists a considerable gain in level and growth of consumptionfrom establishing secure property rights that economicperformance without property rights worsens with an increasingnumber of competing social groups and that the existence orabsence of property rights explains conditional convergence

liberty and development a further empirical perspective this paper uses the wright ratings of economic freedom to investigate the relationship between economic freedom and economic development for most countries in the world this rela tionship is apparently strong and direct for such economic freedoms as freedom of property and freedom of movement but inverse for freedom of association these findings appear to be indepen dent of the type of economic system or civil liberties as measured by the gastil ratings which have their own important effects on economic development