industrial pollution abatement the impact on balance of trade this paper uses an ex post partial equilibrium framework to measure the impact of marginal changes in industrial p ollution abatement costs on the u s balance of trade in general and balance of trade with canada in particular the impacts are found to be negative for most industries growing with trade volume and smal l relative to domestic consumption in addition some evidence is fou nd that pollution control programs have changed the u s comparative advantage such that more high abatement cost goods are imported and m ore low abatement cost goods are exported

material flows vs natural capital what makes an economy sustainable abstract in the discourse about sustainable development constant natural capital is frequently referred to as a criterion for ecological sustainability but what is natural capital the concept will be analyzed by presenting arguments in favour of using the term and different versions of sustainability strong and weak subsequently a critique of the natural capital concept is brought forward from an ecological as well as from an economic perspective following this critique the use of material inputs and the material input per unit of service mips as a measure for the environmental impact potential is suggested dematerialisation is understood to be an alternative management rule for sustainability in conclusion a change of perspective is proposed due to the conceptual and measurement problems associated with the constant natural capital criterion which refers to a stock it seems more reasonable from a scientific as well as from a practical perspective to add flows i e material inputs to a decision criterion for whether a development is sustainable or not

the environment and welfare implications of trade and tax policy developing countries with comparative advantage in dirty industries face the risk of environmental degradation unless appropriate policies are implemented using applied general equilibrium analysis we examine how trade influences the environment and assess the welfare and environmental implications of alternative pollution abatement policies for indonesia our results indicate that unilateral trade liberalization by indonesia would increase the ratio of emission levels to real output for almost all major pollution categories more importantly when tariff removal is combined with a cost effective tax policy the twin objectives of welfare enhancement and environmental quality improvement appear to be feasible this sheds new and positive light on the role of trade in sustainable development

ideas interests and oil prices the political economy of trade reform during soeharto s indonesia indonesia since the late 1960s constitutes an excellent case study in the political economy of trade protection there have been major changes in the overall policy regime from liberalism to significant intervention and back towards liberalism there have been large though declining inter industry variations in effective protection there has been a lively domestic debate much of it dominated by non economists many actors at home and abroad have a stake in that debate and since the 1980s at least trade policy interventions have been reasonably well documented and quantified in this paper we show how quantitative analysis may be employed to shed light on changes in the trade policy regime over time we also examine the principal actors with an interest in and influence over trade policy delineating where possible how their influence translated into the policy arena finally we speculate on whether the framework developed in this paper is applicable to the very different circumstances prevailing in the post soeharto era

making economic policy in weak democratic post crisis states an indonesian case study summary economic crises in developing countries differ in their causes severity and recovery trajectories the literature on the causes and immediate management of these crises is well developed however it is more difficult to develop an a priori framework which facilitates an analytical interpretation of how crises affect economic policy and hence recovery this is especially so in the commonly occurring twin crises in which an economic crisis interacts with regime collapse country studies are needed to contribute to the development of such a framework this paper addresses these issues with reference to indonesia s deep economic and political crisis of 1997 98

social capital and institutional trust evidence from bolivia s popular participation decentralisation reforms this article uses bolivia s emblematic process of decentralisation popular participation to explore the elusive relationship between interpersonal and institutional trust as central components of social capital the evidence corroborates the notion that basic social interaction and more complex institutional settings are strongly co related such as the trust that individuals place in their governments and institutions the data also shows that social capital has a direct effect on civic activism and political behaviour at the individual level the notion of social capital is present throughout the analysis as this type of capital allows observing and measuring changes in social structures that affect more complex institutional arrangements

duty fear and tax compliance the heuristic basis of citizenship behavior theory the costs imposed by income tax and other citizenship duties provide powerful incentives to free ride yet the likelihood of getting caught the primary self interested deterrent to free riding is unlikely to be known with much accuracy by most citizens thus the duty heuristic provides not only a direct motivation to comply but also influences behavior through cognitive processes that bias self interested beliefs about the advantages of free riding hypothesis citizens beliefs about their duty to obey laws of the state bias their information processing and judgements about the fear of getting caught and punished for disobedience so citizens reporting greater commitment to obey tax laws systematically overestimate the expected penalty for noncompliance methods regression analysis of survey and tax return data for 445 taxpayers results subjective risk of getting caught is more closely related to duty than to objective risk factors objective audit probabilities affect only taxpayers with greater temptation to cheat but duty influences tempted taxpayers as much as ordinary taxpayers

is social capital declining in the united states a multiple indicator assessment despite a great deal of interest in a possible decline of social capital in the united states scholars have not reached a consensus on the trend this article improves upon previous research by providing a model of social capital that has explicit links to theories of social capital and that analyzes multiple indicators of social capital over a 20 year period the results do not consistently support putnam s claim of a decline in social capital showing instead some decline in a general measure of social capital a decline in trust in individuals no general decline in trust in institutions and no decline in associations

social capital and interlocal service collaboration in us counties abstractsocial capital and interlocal service collaboration in us counties regional studies local governments are increasingly faced with public policy problems that span across their individual jurisdictional boundaries interlocal service collaboration has been suggested as a preferable alternative to address these issues this study examines the association between collective social capital especially focusing on putnam type organizations and interlocal service collaboration by investigating the interlocal revenues at the county level for the fiscal year 2002 in the united states an instrumental variables estimator to address a potential endogeneity problem of social capital was adopted the results show that social capital is positively associated with interlocal service collaboration further analysis revealed that 15 8 of counties variation in interlocal service collaboration was attributed to the state level

fuel taxes an important instrument for climate policy abstract this article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished fuel taxes have restrained growth in fuel demand and associated carbon emissions although fuel demand is large and growing our analysis shows that it would have been much higher in the absence of domestic fuel taxes people often assert that fuel demand is inelastic but there is strong research evidence showing the opposite the price elasticity is in fact quite high but only in the long run in the short run it may be quite inelastic which has important implications for policy makers had europe not followed a policy of high fuel taxation but had low us taxes then fuel demand would have been twice as large hypothetical transport demand in the whole oecd area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date yet this fact is not usually given due attention in the debate

the north american free trade agreement an ecological economic synthesis for the united states and mexico abstract the prospect of a north american free trade agreement nafta has alarmed environmentally concerned professionals and citizens because of potential for exacerbated environmental destruction in each country the concern in the trade and business community is that provisions for environmental protection would hobble the trade agreement and could effectively negate the positive economic benefits the purpose of this paper is to consider the various environmental and economic implications of nafta and suggest policies that should allow for both a functional nafta and environmental protection this paper summarizes the various potential environmental impacts along with existing free trade mechanisms for environmental protection it evaluates the rationale for a transition from current free trade doctrines to those of sustainable free trade also recommended are several suggestions including the creation of a companion north american environmental protection treaty naept this treaty would contain trade related policies beneficial to the environment but inappropriate to a trade agreement it would include short term expansion of gatt articles for protection of the environment and longer term transformation of gatt into a general agreement on trade and the environment gate a form of countervailing duties called recompensing duties and a form of pigovian tax called a retributive environmental impact rei tax designed to ease adverse social economic and environmental impacts during the transitional period of upward harmonization of standards are proposed specific recommendations for nafta naept and gate are provided

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

reconciling trade and environment towards a comparative advantage for long term policy goals abstract for an economic order to remain within ecological boundaries countries need to respond to ecological feedback effects resulting environmental compliance costs have so far hardly influenced trade flows and firm location decisions future developments of economic integration and the increasing urgency of stricter environmental objectives are shown to change this picture primarily for the case of transnational and global environmental problems countries will need to be relieved from the threat of competitive disadvantage caused by environmental production process regulation that the current international regulatory trade framework implies the first option to do so international harmonization of environmental regulation is connected to a range of shortcomings especially for countries differing in natural endowments and preferences for counterbalancing measures two regulatory frameworks are analyzed based on a a physical inventory system or b a direct environmental compliance cost comparison the adequacy of the physical system is shown to be limited whereas the cost basis option can be applied on a broader range it cannot fully re establish the optimal situation that would be achieved by an often unlikely environmental agreement but would encourage countries to take necessary unilateral environmental action changing current trade regulation in that respect will be crucial to foster sustainable development

estimating the price of tradable permits for greenhouse gas emissions in 2008 12 abstract many attempts have been made recently to predict the prices of tradable permits for greenhouse gas ghg emissions in the first commitment period of the kyoto protocol 2008 12 in this paper we attempt to refine these price estimates based on i the results of economic models and identification of factors which influence prices but are not fully reflected in the models ii lessons from price forecasting experience in the us sulfur dioxide market and iii current price data from the nascent international market for ghg permits we expect ghg permit prices to be at the lower end of the broad spectrum of existing predictions this implies among other things that resource transfers to developing countries associated with emissions trading will be relatively low nevertheless even a modest price will have a significant influence on the decisions of consumers and investors in energy markets around the world

trade environment and development the issues in perspective abstract this special issue on trade and the environment brings together a number of papers that are constructively critical of the conventional economic wisdom on the topic we think that this criticism is warranted because of the decidely uncritical way in which free trade has been advocated in much of the literature and especially in policy the papers analyse the validity of the underlying assumptions on which the conventional wisdom is based and provide suggestions for ways to facilitate trade that is also adequately protective of the environment sustainability and other social values in this introductory piece we discuss trade the environment and sustainability summarizing arguments in the papers included in this issue and adding a few additional points not covered by them

marginal tax reform externalities and income distribution the paper examines welfare improving and revenue neutral directions marginal policy reforms for an economy with nonidentical individuals and an externality that has a feedback effect on the consumption of taxed goods it considers three types of policy instruments the indirect taxes the uniform poll transfer and public abatement this extends the framework set up by ahmad and stern 1984 bovenberg and de mooij 1994 and schob 1996 the theoretical model is illustrated for a specific externality namely congestion caused by peak car transport

the market for tradable ghg permits under the kyoto protocol a survey of model studies abstract this paper gathers results from 25 models of the market for tradable greenhouse gas ghg emission permits under the kyoto protocol due to diverging projections of emissions growth and different modeling approaches the model results differ substantially the average market volume is approximately 17 and 33 billion usd under global trading and annex b trading respectively including non carbon ghg lowers compliance costs and permit prices in the absence of the us permit demand roughly equals hot air from the former soviet union these countries can increase their revenues from selling permits by restricting supply which raises the permit price

indicators of sustainable development some lessons from capital theory abstract interest in sustainable development has prompted a search for suitable indicators that might complement or supplant the traditional measures of economic success although there is no agreement about the precise meaning of sustainable development one idea which is increasingly in good currency is that sustainable development requires that the stock of capital that one generation passes on to the next be maintained or enhanced further this stock of capital is seen by some to comprise two elements manufactured capital and natural capital the extent to which these are believed to be substitutes or complements is one factor which separates the neoclassical school from some of its critics a premise of this paper is that if capital theory is relevant to sustainable development then it should also be helpful in developing indicators however even within the normal confines of economics capital theory is not a homogeneous body of analysis therefore an exploration of capital theory and its relevance to sustainable development can be expected to generate various perspectives on those measures most useful for gauging the sustainability of economic activity it is these linkages between capital theory in various schools of thought and possible indicators of sustainable development that are the subject of this paper

green accounting and economic policy abstract through the lens of conventional national accounting resource depletion and natural environment degradation often appear misleadingly as desirable economic growth the old system of national accounts sna has been revised and a set of environmental satellite accounts proposed certain weaknesses however pervade the new proposals the conventional measurements remain largely unaltered and the satellite accounts are of unclear purpose and unnecessarily complex as proposed they rely on the valuation of environmental stocks while the economically more important flow accounts to their detriment are to be derived indirectly from changes in stock values the sna the paper stresses is primarily an economic framework incapable of capturing all environmental change and the national accounts are far more useful economically than environmentally greening the accounts would be optional for most affluent countries whose overriding environmental concern is pollution this can be addressed directly through taxation and regulation pollution information in satellite accounts can indeed be valuable but revised and fully integrated resource accounting is a priority concern for those developing countries that are running down natural resources and for which conventional accounting distorts macroeconomic measurement analysis and policy the paper argues that green accounting can only ensure income sometimes called weak sustainability which should be considered as a step leading ultimately to an ecological or stronger sustainability

international trade and the sustainability footprint a practical criterion for its assessment a simple and minimal criterion for sustainability is that the value of natural capital plus manufactured capital be not decreasing on the basis of any individual country or region the above simple comparison may be misleading as it does not take account of the production of goods for consumption in other countries regions via international trade in other terms the full environmental footprint of a country may not be properly assessed a method of calculating a weak sustainability criterion has been established for both a closed economy approach and an open economy approach there are significant differences between the open and closed economies measures for several regions particularly the middle east overall global sustainability on this criterion has been positive and increasing using a difference equation approach a further analysis has been made of the average proportional rate of change of global sustainability between 1980 and 1990 and its various regional and structural components have been determined these indicate that most of global sustainability growth can be attributed to western europe other asia and japan particularly through high savings ratios the usa on the other hand has made a very small net contribution to the growth in global sustainability

granger causality and the time series analysis of political relationships political scientists have employed causal modeling techniques for quite some time in most cases however they have relied on methods of a static cross sectional variety time series methods have been disseminated and applied but these have not been expressly causal the problem of assessing the causal character or direction of political relationships over time has not been addressed granger 1969 has suggested a notion of causality that is applicable in longitudinal analysis the study and application of granger s idea of causation now is widespread in economics and business this discussion evaluates the usefulness of applying granger causality in the study of political relationships granger s definition of causality is introduced several popular procedures for assessing granger causality are reviewed and certain problems surrounding interpretation of those empirical tests are elucidated the virtues and pitfalls of granger causal analysis then are illustrated in an analysis of an important topic in international political economy and also in a reanalysis of a recent granger causal investigation of arms races

optimal tax and public investment rules for congestion type of externalities optimal government policy is considered in a second best framework where consumers and producers cause an externality of the congestion type and income distribution issues are taken into account the theoretical results of the optimal tax literature are adapted using the concept of the net social pigouvian tax an illustrative age model uncovers the relative importance of its components the model demonstrates that the level of the externality tax does not depend strongly on distribution concerns as reoptimization of the other taxes ensures that the income distribution objective is reached the model also allows us to study the interaction between externality taxes and public abatement

making trade policy in a new democracy after a deep crisis indonesia this paper examines the recent political economy of trade policy in indonesia against the backdrop of two major events the deep economic crisis of 1997 98 and the transition from three decades of rapid growth under an authoritarian regime to a weaker but democratic state we investigate both international and domestic trade policy the international trade policy regime has remained largely open perhaps surprisingly in view of the unpopularity of liberal economic policies in the wake of the crisis and the forces advocating more protectionist policies however this openness is precarious and lacks both institutional and community opinion support in contrast while remaining largely open at the international border domestic barriers to trade have increased this conjunction of economic crisis and weak democratic states is a common phenomenon in the developing world and the lessons for trade policy from the indonesian experience over this decade are therefore relevant to many other countries

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

testing tariff endogeneity in japan a comparison of pre and post war periods abstract this paper tests an endogenous tariff model for japan 1890 1970 using a vector autoregression var i find that tariff changes are endogenous in the post war period rather than being designed to promote economic activity this suggests that tariffs respond to macroeconomic disturbances

pollution taxes and revenue recycling abstract discussions of environmental policy and the tax system have emphasized the value of pollution tax revenues which can be used to reduce other tax distortions in the economy however by raising private marginal production costs environmental taxes also tend to reduce gdp and exacerbate the welfare costs of conventional taxes for environmental taxes in consumption goods industries the net welfare change from these two effects is negative unless this good is a relatively weak substitute for leisure an estimate for the optimal pollution tax with full revenue recycling is 63 to 78 of marginal environmental damages

trade and the environment from a southern perspective the relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics environmental economics assumes a positive relationship between free trade economic growth and environmental policies environmental externalities may cause important damage however trade is not to be blamed for this instead the fault lies with policy inadequacies at the national level on the other hand some ecological economists criticise the assumptions of environmental economics especially the immobility of production factors and the positive correlation between income and environmental quality they plead for measures to prevent deterioration of northern environmental standards in a race to the bottom due to ecological dumping from the south in this paper we argue that neither environmental economics nor northern ecological economics take into account the structural conditions determining the international trade system based on some new empirical evidence on material flows we stress the notion of environmental cost shifting if physical and political ecology perspectives are adopted a southern approach to the trade and environment issue may arise 2001 elsevier science b v all rights reserved

running to keep in the same place consumer choice as a game of status if individuals care about their status defined as their rank in the distribution of consumption of one positional good then the consumer s problem is strategic as her utility depends on the consumption choices of others in the symmetric nash equilibrium each individual spends an inefficiently high amount on the status good using techniques from auction theory we analyze the effects of exogenous changes in the distribution of income in a richer society almost all individuals spend more on conspicuous consumption and individual utility is lower at each income level in a more equal society the poor are worse off

indonesia trade policy review 2007 this paper examines the 2007 wto review of indonesian trade policy indonesia undertook a major policy liberalisation in the late 1960s serious protectionist pressures emerged in the 1970s but for most of this period and especially since the mid 1980s the economy has remained broadly open we summarise the wto report update some of its analysis highlight its key findings and point to some trade policy issues that in our opinion warranted greater attention the main theme of the paper is that indonesia is a largely open economy but that this openness on occasion remains precarious there are both political economy rent seeking forces opposed to the current openness and perhaps more importantly much of the country s influential public opinion is sceptical of the merits of an open economy and deeper global commercial integration nor is there a deeply institutionalised support for openness in the country s bureaucracy and polity seen from this perspective a key question to answer is why the country has remained open particularly since the deep economic and political crises of 1997 98

why northern income growth is not the solution to southern poverty abstract decreasing southern poverty is arguably today s main goal of economic development the two main views on how this can be achieved are not compatible the traditional view held by most economists and development agencies is not working well the traditional view is that rich northern high consumption societies should consume yet more in order to help the south by providing larger markets this paper outlines the alternative view that the north should stabilize its resource consumption and reduce its damage to global life support systems any higher consumption must come from productivity improvements rather than from increased throughput growth if natural resources were infinite then growth would be unreservedly good since resources are finite more northern growth inevitably means less room for southern growth for example the north has consumed much global sink capacity by its co 2 and cfc emissions productivity improvements must replace throughput growth as the path of progress for the north and eventually for the south as well

industrial metabolism and the linkages between economics ethics and the environment abstract with industrialization the material flows in the world have grown enormously expanded geographically and become more open and complex traditionally the emissions have been strongly connected to earlier steps in the material flows extraction and raw materials intensive industry but during the last few decades the emissions from industrial pointsources have decreased radically in the western industrialized world the result of the industrial cleanup is a shift towards the latter steps of the societal material flows the relative importance of consumption emissions has increased as indicated in studies of the rhine basin important prerequisites for this development have been increasing environmental awareness and public opinion putting pressure on legislators authorities and companies and a dynamic industrial development with structural changes that have permitted investments in modern technology and emissions control despite the often radical emission reductions problems with acidification eutrophication diffusion of persistent organic chemicals and climate change still persist on a regional and global level during the last decade there has been an increasing emphasis on the international and global environmental problems the materials flow perspective has experienced a major breakthrough waste minimization recycling life cycle analysis and environmental auditing have become major themes in most european countries and have also started to influence industry the importance of the consumer and his attitudes and actions as well as the relationship between trade and environment are often emphasized in this context the industrial metabolism approach needs further development to be able to assist in meeting the modern challenges of environmental management to sum up flows of a few elements or products in a limited region is not sufficient it is necessary to develop the analysis of the context of the flows include industrial economic and geographical change in the analysis and more actively seek connection to political and industrial decision making and human behavior and attitudes the time geographical process landscape launched by torsten hagerstrand could be an important source of inspiration in this context

energy taxation and the double dividend effect in taiwan s energy conservation policy an empirical study using a computable general equilibrium model abstract faced with pressure from greenhouse gas reductions and energy price hikes the taiwan government is in the process of developing an energy tax regime to reflect environmental external costs and effectively curb energy consumption as well as mitigate co2 emissions through an adequate pricing system this study utilizes a cge model to simulate and analyze the economic impacts of the draft energy tax bill and its complementary fiscal measures under the assumption of tax revenue neutrality the use of energy tax revenue generated for the purpose of reducing income tax is the best choice with double dividend effects since it will effectively stimulate domestic consumption and investment and consequently mitigate the negative impacts of the distortionary tax regime the double dividend effect is less significant however when the supplementary measures being used are for government expenditure nevertheless all supplementary measures have effectively reduced energy consumption which means they have delivered at least the first dividend in the sense of co2 emissions control it has been verified in this study that having adequate public finance policy measures is the key to realizing the double dividend effect

towards an ecological theory of unequal exchange articulating world system theory and ecological economics abstract the focus of this paper is on how an ecological perspective might provide us with an analytically more precise way of defining unequal exchange it is only by looking at the ecological conditions of human economies that we can adequately conceptualize the mechanisms which generate inequalities in distribution considerations of market power aside neoclassical economic ideology has dispelled all possible criteria for assessing a market transaction as unequal or unfair one way to assess the occurrence of unequal exchange may be to look at the direction of net flows of energy and materials concrete productive potential but without falling into the trap of equating productive potential with economic value on the contrary it can be analytically demonstrated that unequal exchange emerges from a kind of inverse relationship between productive potential and economic value the notion of a reasonable market price conceals the fact that what is being exchanged are intact resources for products representing resources already spent if we consider longitudinally along the production process any given set of fuels and raw materials destined to be transformed into a given product plus waste its content of available energy will be inversely related to its utility or price in other words the more of its original energy that has been dissipated the higher its price this means that production i e the dissipation of resources will continuously be rewarded with ever more resources to dissipate generating ecological destruction and global core periphery inequalities as two sides of the same coin

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

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

pollution intensity of gdp and trade policy can the world bank be wrong abstract what are the environmental implications of open trade policies in developing countries economic theory and environmental critics suggest they worsen environmental quality this conventional wisdom has been challenged by several studies which suggest that outward oriented trade policies are likely to be win win enhance economic growth and environmental quality this paper challenges revised conventional wisdom rcw by demonstrating that developing countries with outward oriented trade policies have higher pollution intensities of gdp than those following inward oriented policies the paper examines why the evidence reported here differs so sharply from rcw studies considers the policy implications of these results and identifies reasons why despite them it may not make sense to totally discount future potential win win opportunities

reflections on the double dividend debate we survey the history of carbon taxation the range of market based instruments mbis of environmental control and the state of the double dividend debate in order to suggest directions for future research into mbis returning mbi revenues as lower distortionary taxes rather than as lump sums raises aggregate welfare but we favour mbis which raise little or no revenue for reasons of political acceptability to interest groups at the same time the overall case for any environmental improvement is weaker because of general equilibrium interactions with prior distortionary taxes research seems most necessary on quantifying the efficiency benefits of market control of heterogeneous polluters the benefits of environmental improvement the tax interaction effect and the various information costs of an mbi all on a case by case basis for different pollutants and places

the efficiency value of effluent tax revenues the concept of the efficiency value of effluent tax revenues is developed it is defined as the reduction in excess burden resulting from the substitution of these revenues for current or future resource distorting tax revenues such as those raised from federal corporate and personal income taxes the annual efficiency value of revenues raised by national effluent taxes on two major air pollutants is estimated to range from 0 63 to 3 05 billion if substituted for federal personal income tax revenue and from 1 to 4 87 billion if substituted for corporate income tax revenue expressed in 1982 dollars thus previous estimates of the efficiency gain from substitution of an effluent tax scheme for current pollution regulation policy have been too low because the efficiency value of the tax revenues has been excluded

the distributional implications of a carbon tax in ireland we study the effects of carbon tax and revenue recycling across the income distribution in the republic of ireland in absolute terms a carbon tax of 20 tco2 would cost the poorest households less than 3 week and the richest households more than 4 week a carbon tax is regressive therefore however if the tax revenue is used to increase social benefits and tax credits households across the income distribution can be made better off without exhausting the total carbon tax revenue

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

social capital and the dynamics of trust in government it is well understood that trust in government responds to the performance of the president congress and the economy despite improved government performance however trust has never returned to the levels witnessed in the 1950s and 1960s social capital may be the force that has kept trust low if so we need to assess the relative contributions of both government performance and social capital at the macro level using macrolevel data the analysis here is designed to capture the variation over time in both social capital and government performance and let them compete to explain the macro variation in trust the empirical results demonstrate that both government performance and social capital matter but that social capital appears to be the force which accounts for the decline in trust over the last 40 years

limits to the growth paradigm abstract this paper is a synthesis of several current controversies it makes four broad claims 1 that economic growth as conventionally measured is not and never has been the most important contributor to increasing human welfare 2 that technological progress has always been the primary source of both growth and welfare considered separately 3 that trade was at best a minor contributor to growth in the past and is probably now contributing negatively to both national wealth and equity hence to welfare in western europe and north america and 4 that both growth of gdp and trade are increasingly incompatible with environmental protection in fact while increasing prosperity breeds environmental sensitivity many of the processes by which it is achieved are environmentally destructive the paper assembles and presents some of the key arguments and evidence

sectoral effects of a green tax reform in portugal abstract economic downturn coupled with serious and persisting environmental problems require a new regulation system to tackle these problems the portuguese government created the commission for the green tax reform in 2014 following the guidelines of the european union in the sense that fiscal policy should contribute to public budget consolidation and sustainable growth the commission was commissioned to propose a simplification of taxation in order to promote economic competitiveness environmental sustainability and the efficient use of resources the aim of this paper is to present the results from one of the teams that have contributed to the commission for the green tax reform we have followed the european commission guidelines in order to simulate a green tax reform with a static general equilibrium model and aligned to the political context we found that i it is possible to enjoy a positive double dividend ii to achieve improvements in the energy trade balance and energy independence and iii to reduce the energy intensity of the portuguese economy

determinants of taiwan s trade liberalization the case of a newly industrialized country abstract this paper attempts to account for the success of policy reform in taiwan s trade liberalization through an investigation of the periods 1986 92 and 1992 95 the objective is to undertake an empirical examination of haggard et al s the political feasibility of adjustment in developing countries development centre of the oecd oecd paris 1995 strategies for minimizing the political costs involved in implementing policy reforms empirical evidence supports the haggard et al arguments that is indirect compensation is used to facilitate the implementation of trade liberalization for downstream industries while the speed of trade liberalization within certain specific industries is comparatively slow furthermore in a democratic regime the pressure brought to bear by well organized domestic interest groups along with the pressure from international interest groups can strongly influence the pattern of trade liberalization policies

substituting pollution taxation for general taxation some implications for efficiency in pollutions taxation abstract earlier papers have recognized that nonenvironmental benefits will be realized if pollution taxes are substituted for other taxes which impose efficiency losses on society the purpose of this paper is to investigate the importance of these nonenvironmental benefits for the design of an efficient pollution tax it is found that the efficient tax may be higher or lower than that conventionally defined as optimal and that the net benefit from unrestrained pollution can have important implications for the size of the tax

the ecological fallacy revisited aggregate versus individual level findings on economics and elections and sociotropic voting several aggregate level studies have found a relationship between macroeconomic conditions and election outcomes operating in intuitively plausible directions more recent survey based studies however have been unable to detect any comparable relationship operating at the individual voter level this persistent discrepancy is puzzling one recently proposed explanation for it is that voters actually behave in an altruistic or sociotropic fashion responding to economic events only as they affect the general welfare rather than in terms of self interested pocketbook considerations it is argued here that the discrepancies between the macro and micro level studies are a statistical artifact arising from the fact that observable changes in individual welfare actually consist of two unobservable components a government induced and politically relevant component and an exogenous component caused by life cycle and other politically irrelevant factors it is shown that because of this individual level cross sectional estimates of the effects of welfare changes on voting are badly biased and are essentially unrelated to the true values of the behavioral parameters of interest they will generally be considerable underestimates and may even be of the wrong sign an aggregate level time series analysis on the other hand will often yield reasonably good if somewhat attenuated estimates of the underlying individual level effects of interest thus in this case individual behavior is best investigated with aggregate rather than individual level data it is also shown that the evidence for sociotropic voting is artifactual in the sense that the various findings and evidence which ostensibly show sociotropic behavior are all perfectly compatible with the null hypothesis of self interested pocketbook voting

impacts of tariff escalation on the environment literature review and synthesis abstract writers on trade and environment often claim that tariff escalation harms the environment it skews exports toward raw materials and away from processed goods so to the extent that primary production degrades the environment more than processing it will harm exporting countries this paper reviews the literature on tariff escalation and the environment focusing on 1 a impact of escalating tariffs on the allocation of production and processing between exporters and importers 2 b comparison of the environmental impacts of primary production and processing 3 c impact of increased income from removing tariff escalation on environmental protection expenditures 4 d environmental impact of decreased transport of freight it concludes that tariff escalation is not likely to be a significant source either of economic distortion or of environmental harm

are duty drawbacks on exports worth the hassle many countries use duty drawbacks on exports yet there is no consensus whether countries should embrace or abandon them the answer depends on countries development priorities and economic conditions an increase in the drawback has a positive impact on export competitiveness but the welfare effect is ambiguous a welfare increase is more likely if the economy is small with high input tariffs low initial drawback low administrative costs and tariff leakages in china duty drawback removal after meeting its wto commitments improves welfare but hurts economic efficiency export competitiveness and real incomes further liberalization can mitigate these negative effects plusieurs pays utilisent ce genre de rabais de tarifs douaniers mais il n y a pas de consensus a savoir si on doit supporter ces mesures ou les abandonner la reponse depend des conditions economiques et des priorites de developpement des divers pays un accroissement de ces reductions a un effet positif sur la competitivite des exportations mais ses effets sur le niveau de bien etre sont ambigus un effet de bien etre positif est plus probable si l economie est petite et a des hauts tarifs sur les intrants de faibles rabais des couts administratifs faibles et peu de fuites en chine l elimination de ces rabais en accord avec les engagements exiges par l omc a ameliore le niveau de bien etre mais a eu un effet negatif sur l efficacite la competitive des exportations et les revenus reels une liberalisation accrue peut attenuer ces effets negatifs

development trade and the environment which way now abstract in recent times environmental protection has emerged to occupy much of the center stage in discussions of economic development the fact that most if not all developing countries trade with each other has given the concept of environmental protection a distinctively international focus in this note i identify and discuss five of the most important themes in trade and the environment that are likely to impact developing countries in a significant manner in the future

trust and taxpaying testing the heuristic approach to collective action theory trust is a critical attitude that extends the duty heuristic developed in scholz and pinney 1995 the trust heuristic can provide the basis for a contingent compliance strategy capable of sustaining cooperative solutions to collective action problems of governance if two conditions are met first compliance with laws must be conditional on levels of trust in specific legal arenas second a citizen s trust in government and trust in other citizens willingness to obey the law must reflect the costs and benefits associated with obeying laws hypothesis this article tests the first hypothesis in the tax arena trust in government and in other citizens increase compliance over and above the levels expected from an internalized sense of duty to obey laws and the fear of getting caught by enforcement agencies like the irs method we test the hypotheses with regression analysis of survey and tax return data from a stratified sample of 299 middleand upper income taxpayers using the newlydeveloped two stage conditional maximum likelihood analysis to control for endogeneity we extend this approach to the analysis of multi categorical ordered dependent variables findings both dimensions of trust significantly increase the likelihood of tax compliance even after controlling for duty fear selection bias and potential endogeneity effects

reevaluating the first and the second dividends of environmental tax reforms abstract there is increasing global interest in market based climate change policies following the last elections in the united states in this context an exxon mobil chief executive came out in favour of a carbon tax this paper is concerned with the welfare analysis of environmental tax reforms etr and takes up the claims for the need of an unambiguous and operative definition of the double dividend both for empirical purposes and political advisement in this paper we contest the usual definition of the second dividend and its assimilation to an efficiency dividend we propose alternative definitions by suggesting a different splitting of the total welfare variation between the first and the second dividend in order to isolate the efficiency effects of the etr the new definitions become clearly understandable and easy for economic and policy interpretation concepts like weak and strong double dividend turn out to be unnecessary finally we analyze etr for the us economy to illustrate the advantages of the proposed definitions for policy implementation

the protectionist bias of duty drawbacks evidence from mercosur in a political economy setting where tariffs and duty drawbacks are endogenously chosen through industry lobbying it is shown that full duty drawbacks are granted to exporters who use imported intermediates in their production this in turn decreases their incentives to counter lobby against high tariffs on their inputs in equilibrium higher tariffs will be observed on these goods the creation of a regional block will change the political equilibrium duty drawbacks will be eliminated on intra regional exports which in turn will lead to lower tariffs for goods used as inputs by intra regional exporters evidence from mercosur suggests that the elimination of duty drawbacks for intra regional exports led to increased counter lobbying by users of intermediate products in its absence the common external tariff would have been on average 3 5 percentage points 25 percent higher