foreign direct investment and technological capabilities in brazilian industry the purpose of this paper is to make a contribution to a further understanding of the implications of the growing presence of foreign affiliates for deepening technological capabilities tcs in brazilian industry it proposes a tc classification that emphasises the distinction between the use and generation of knowledge and presents a methodology for composing tc proxies by means of an innovation survey database the findings suggest that both foreign and domestics firms have accumulated substantial capabilities for using existing technology but only shallow capabilities for locally generating technologies however foreign affiliates score higher than their local counterparts in more complex capabilities confirming their centrality in the brazilian learning system this gives ground for urging the elaboration of strategic foreign direct investment fdi policies that strengthen and deepen local tcs

war revolution and the growth of the coercive state modern states are powerful resilient institutions the most durable of which have established and consolidated their rule through conquest revolution and war successful involvement in violent conflict leads to the development of militarized and police states and reinforces elite political cultures that favor the use of coercion in future disputes if warfare has unfavorable outcomes elites will prefer noncoercive strategies in the future from these and other propositions are derived models of the processes by which garrison states emerge and persist in autocracies and democracies states with high material capabilities are more likely to become garrison states than weaker states which tend to avoid international conflict and to rely on accommodation in internal conflicts states with low political capabilities are susceptible to revolutionary overthrow and the establishment of revolutionary garrison states the role of diversion of domestic conflicts to the external environment also is considered

environmental regulation industrial innovation and green development of chinese manufacturing based on an extended cdm model abstract as for the academics and policymakers more attention has been given to the issue on how to drive green development of the manufacturing through regulations and innovations we construct the extended crepon duguet mairesse cdm model and employ the panel data of chinese manufacturing industries during 2003 2014 to examine the effects of environmental regulation on industrial innovation and green development the findings reveal that 1 in the long term environmental regulation has crowded out r d investment 2 environmental regulation has inhibited patent outputs so that the weak version of porter hypothesis is not underpinned 3 in the short term environmental regulation has promoted the improvements of labor productivity energy efficiency and environmental efficiency in the manufacturing industry excluding green total factor productivity gtfp whereas in the long term environmental regulation only has increased energy efficiency while it has obstructed labor productivity which provides no support for the strong version of porter hypothesis 4 different innovation outputs have distinct influences on labor productivity energy efficiency environmental efficiency and gtfp finally this paper provides pertinent policy implications

the futile quest for a grand explanation of long run government expenditure this paper carries out a critical reappraisal of the two contending theories purporting to explain long run government spending wagner s law and different variants of the ratchet effect we analyze data spanning from the early 19 th century until the present day in sweden and the united kingdom hence in contrast to previous studies we evaluate the validity of wagner s law and the ratchet effect hypothesis over a very long time period starting at the beginning of industrialization cointegration analysis is used to investigate the long run relationships between government expenditure and gdp focusing on sub periods and structural breaks moreover we test the ratchet effect hypothesis by estimating models which allow for asymmetric adjustment according to our main results wagner s law does not hold in the long run although the data are consistent with wagner s law between roughly 1860 and the mid 1970s this can be traced to the formation of the modern public sector including the introduction of public education health care and so forth yet wagner s law did not hold during the initial industrialization phase before 1860 and in recent periods gdp only affects the government spending share when we control for population age structure finally we find some evidence of asymmetric adjustment in the uk particularly in the post wwii period however the ratchet effect is not a general cause of the growth of government spending

institutional selection in international relations state anarchy as order by the end of the medieval era three new competing institutions attempted to capture gains from trade and reduce feudal particularism sovereign territorial states cityleagues and city states by the middle of the seventeenth century city leagues and city states had declined markedly territorial states survived as the dominant form because they were able to reduce free riding lower transaction costs and credibly commit their constituents the selection process took place along three dimensions first sovereign territorial states proved competitively superior in the economic realm second states increasingly recognized only other sovereign territorial states as legitimate actors in the international system third other actors defected to or copied the institutional makeup of sovereign territorial organization the emergence of discrete territorial units in which only sovereign authorities represented their citizens as the predominant type of organization in international affairs created a new solution to the problem of markets and hierarchies

politics time and the laffer curve why should a rationally motivated political decision process generate an inverse relationship between tax rates and tax revenues there would never seem a logical reason for increasing tax rates beyond maximum revenue limits in this note we explain how such a position can emerge and show why once in such a position political decision makers may find it difficult to escape

productivity convergence in the european regions 1980 2003 a sectoral and spatial approach this article analyses the evolution of the eu productivity between 1980 and 2003 both across regions and sectors by making use of various techniques cross section nonparametric and spatial approaches it concludes that 1 the regional and sectoral dispersion of productivity is quite high 2 the gains experienced in aggregate productivity are due entirely to the sectors productivity growth effect 3 there is a weak beta convergence process at the aggregate and sectoral levels 4 the accounting decomposition of the aggregate productivity convergence process reveals the sectoral productivity growth effect to be the only responsible factor for regional catching up 5 finally there are clear signs of spatial dependence which when properly addressed increase the speed of convergence at the aggregate level

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

comparing optima do simplifying assumptions affect conclusions consider a family of maximization models in which the optimum trades off beneficial and costly effects then comparative statics derived under many kinds of simplifying assumptions about the benefits technology are also true for general convex and nonconvex technologies for example any comparative statics conclusion about investment by a risk averse decision maker under uncertainty that holds when expected returns are described by a general linear function also holds for an arbitrary nonlinear expected return function

rational irrationality and the microfoundations of political failure models of inefficient political failure have been criticized forimplicitly assuming the irrationality of voters wittman 1989 1995 1999 coate and morris 1995 building on caplan s 1999a 1999b model of rational irrationality the current papermaintains that the assumption of voter irrationality is boththeoretically and empirically plausible it then examinesmicrofoundational criticisms of four classes of political failuremodels rent seeking pork barrel politics bureaucracy andeconomic reform in each of the four cases incorporating simpleforms of privately costless irrationality makes it possibleto clearly derive the models standard conclusions moreover itfollows that efforts to mitigate political failures will besocially suboptimal as most of the literature implicitlyassumes it is a mistake to discount the empirical evidence forthese models on theoretical grounds

political aspects of innovation abstract political aspects that enhance but also undermine the positive transformational power of public innovation policies are examined as such this paper follows michal kalecki in his 1943 paper that identifies the political aspects which enhance and undermine the positive transformational power of keynesian full employment policies similarly this paper provides a policy framework that identifies what government and business support as innovation policies the role of innovation stems from schumpeter s long run perspective but incorporates the more dynamic cyclical short term and trend perspectives of kalecki this paper critiques the strategy of public innovation policy in general and derives policy implications

government growth in the twenty first century public choice explanations of government growth fall into three main categories budget maximization theories rational choice models and path dependent models like the ratchet hypothesis the strengths and weaknesses of these theories as explanations for government growth are considered along with some facts about the actual growth of government to conjecture about its trajectory in the twenty first century government size seems to have been constrained in the past primarily by its ability to raise revenue growth rates in the new century thus appear to depend on factors constraining government s ability to continue to expand the tax base

the economic development democratization relationship does the outside world matter the relationship between economic development and democratization offers a central focus in linking comparative and international politics analysts agree that economic development facilitates democratization but that the relationship is considerably less than perfect should advocates of the democratic peace argument prove to be correct in emphasizing the role of regime type in pacifying international politics an obvious question becomes what else drives democratization besides economic development in this article the authors explore the relationship between domestic development in the form of economic growth and democratization and international conditions they suggest that a number of international factors such as external threat conflict and trade openness can aid or abet democratization and economic growth to systematically analyze one facet of this proposition they use both robust regression and generalized estimating equations and find that the international environment significantly al

factors underlying the growth of local government in the 19th century united states early in the 19th century local governmentsspent less than either the federal or stategovernments by the end of the 19thcentury local governments spent more thanthe federal and state governments combined this growth is obviously related to thegrowth of cities but cities continued togrow in the 20th century while the localgovernment share of total governmentexpenditures fell so the growth of citiescannot be the complete answer anexamination of expenditures and revenues intwo cities boston and baltimore suggests that no one component ofexpenditures was responsible for increasesin total spending rather it appears thatthe primary causal factor was revenuegrowth cities rely heavily on propertytaxes and the increasing value of taxableproperty allowed cities to raise increasingamounts of revenue leading to increasedgovernment spending

did women s suffrage change the size and scope of government this paper examines the growth of government during this century as a result of giving women the right to vote using cross sectional time series data for 1870 1940 we examine state government expenditures and revenue as well as voting by u s house and senate state delegations and the passage of a wide range of different state laws suffrage coincided with immediate increases in state government expenditures and revenue and more liberal voting patterns for federal representatives and these effects continued growing over time as more women took advantage of the franchise contrary to many recent suggestions the gender gap is not something that has arisen since the 1970s and it helps explain why american government started growing when it did

regional welfare disparities the case of the european union the regional welfare distribution in the european union between 1993 and 1998 is examined using several complementary methodologies the results obtained show a reduction in regional welfare disparities over the period analysed it is worth noting in this respect however that regional productivity differences prove to be the main determinant behind observed welfare inequality in the european context moreover there has also been a decline in regional bipolarization over the six year contemplated while the degree of observed intradistributional mobility is relatively low the empirical evidence presented nevertheless reveals the importance of variables such as the national component the spatial location the regional productive structure or the percentage of gdp devoted to investment or to r d expenditure in accounting for the dynamics of the distribution under analysis

technology and competitiveness this paper reviews the literature on technology and competitiveness first the concept of the international competitiveness of a country and various theoretical approaches on the relationship between trade and growth are discussed then a number of empirical studies of the impact of technology as evidenced by r d patents etc on exports are examined the final section summarizes the evidence and considers the lessons for policy copyright 1996 by oxford university press

the evolution of income inequality in the european union during the period 1993 1996 the objective of this work is to analyse the income inequality in the 15 eu countries during the convergence process to the monetary union using the information contained in the european community household panel corresponding to the four first waves using the inverse second order stochastic dominance concept an ordering of these countries has been carried out furthermore this ranking allows one to determine if the differences among eu country members have increased or decreased during this particular period whether the inequality of income has diminished within and between countries over time was studied gini s generalized family indices proposed by donaldson and weymark journal of economic theory 22 67 86 1980 and 29 353 8 1983 and yitzhaki international economic review 24 617 28 1983 have been used this allows one to test the sensitivity of the results obtained to different degrees of inequality aversion and to different equivalence scales taking into account household sizes

intertemporal solvency and indexed debt evidence from brazil 1976 1991 abstract this paper examines domestically held government debt financial indexation inflation and intertemporal solvency in brazil an error correction model is used to examine the temporal causality of expenditures taxation and real indexation evidence shows that for the 1986 1991 period reductions in real indexation followed increases in government spending such reductions while generally associated with anti inflation plans served as implicit defaults the policy was largely unrelated to foreign factors of course such a policy cannot be sustained in the long run accordingly brazil recently ended backward looking financial indexation

accounting for endogeneity when assessing strategy performance does entry mode choice affect fdi survival firms choose strategies based on their attributes and industry conditions therefore strategy choice is endogenous and self selected empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect i highlight how self selection on hard to measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect although this concern applies to a wide range of strategy questions to demonstrate its effect i empirically examine if entry mode choice acquisition versus greenfield influences foreign direct investment survival in specifications that do not account for self selection i find that greenfield entries have survival advantages compared to acquisitions this confirms previous findings however the significance of this effect disappears once i account for self selection of entry mode in the empirical estimates the results confirm that estimates from models that do not account for self selection of strategy choice can lead to incorrect or misleading conclusions

is dualism still a source of convergence in europe this paper aims at assessing whether dualism represents a significant source of the aggregate labour productivity convergence observed across the european regions in the 1980s we use a model of the dual economy based on the work of dixit oxford economic papers 22 229 34 1970 and mas colell and razin oxford economic papers 25 72 79 1973 to obtain hypotheses to be tested in cross region growth regressions we use aggregate and sectoral data for 109 territorial units from 1980 to 1990 our cross section results are consistent with the major predictions of the dual model ignoring dualism as a source of convergence could therefore lead to inaccurate interpretations of the relative roles played by each of the forces behind the process and to inexact assessments of what actions should be taken if any by the european regional policy to help the process become more pervasive

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

global wars public debts and the long cycle the explanation of the rise and fall of the world system s leading powers in terms of uneven economic development tends to overlook the role of the creation and management of public credit and national debts prior to 1815 the netherlands and great britain owed a significant proportion of their respective victories over the larger and wealthier states of spain and france to the development of competitive financial capabilities winning however leads to higher absolute debt burdens which prior to 1945 encouraged postwar reductions in governmental expenditures in this fashion world leaders have contributed to the erosion of their preponderant capability positions before the emergence of international rivals these ideas are elaborated within the context of george modelski s long cycle of world leadership theory and through a brief review of war related financial problems between 1500 and 1815 and the consequent development of national debts the longitudinal analysis of british and american public debt data provides collaborating empirical support

the democratic advantage institutional foundations of financial power in international competition despite their presumed liabilities institutions associated with democracy serve as a source of power in prolonged international competition by increasing the financial resources that states can bring to bear the theory of sovereign debt suggests that a state s ability to raise money through public borrowing is enhanced when debtholders have mechanisms for sanctioning state leaders in the event of default institutions associated with liberal government provide such mechanisms all other things being equal states that possess these institutions enjoy superior access to credit and lower interest rates than do states in which the sovereign has more discretion to default unilaterally liberal states can not only raise more money from a given economic base but can also pursue tax smoothing policies that minimize economic distortions the ability to finance competition in a manner that is consistent with long term economic growth generates a significant advantage in prolonged rivalries these claims are explored by analyzing the anglo french rivalry 1688 1815 and the cold war

decentralized coercion and self restraint in provincial taxation the ottoman empire 15th 16th centuries abstract for technological reasons the central administration of a state may want to entrust to provincial delegates the dual tasks of extracting provincial resources and converting them into coercive force this article establishes that the coercive threat that the delegates pose may make the administration cap the amount they extract the cap will cause the state not to internalize the marginal benefits of provincial economic development it will also induce inefficient economic policies the identified institutional setup is consistent with the political regime economic policy and legislation of the ottoman empire during its classical age

weighting vectors and international inequality changes in environmental indicators an analysis of co2 per capita emissions and kaya factors abstract analyses of international inequality in environmental factors such as the well known co 2 per capita or the kaya factors that is carbon intensity energy intensity and affluence have overlooked the effect that weighting vectors of distance functions and their time variations can have on the evolution of the inequality observed thus for example increases in the relative weight of countries with low emissions tend ceteris paribus to increase the inequality even when the vector of international per capita emissions remains unchanged this effect strictly associated with share variations is assessed in this paper by means of a simple decomposition methodology this methodology allows us to ascertain what part of the time variation of the inequality is attributable to the variations in the shares and or the variations in the environmental variable analysed and in turn suggests extending the analysis to the group components of inequality shorrocks 1980 this proposition is used empirically to assess international inequalities in co 2 per capita and the kaya factors for a variety of sub periods during the 1971 2007 period and for various satisfactory inequality indices

money for nothing politicians rent extraction and political extortion introduction the model 1 background the economic theory of regulation 2 rent extraction the theory of political extortion demonstrations 3 observing extortion the practice of rent extraction 4 validating the model empirical tests of rent extraction 5 contracting for rent preservation the durability problem extensions 6 extraction and optimal taxation excises earmarked taxes and government user charges 7 costs and benefits of interest group organization 8 improving the model worthy yet unanswered questions notes references index

war making and state making governmental expenditures tax revenues and global wars addressing the disputed relationship between war and the expansion of governmental expenditures and revenues box tiao intervention models are applied to a number of british 1700 1980 united states 1792 1980 french 1815 1979 and japanese 1878 1980 spending and taxation series distinguishing between global and interstate wars the more intensive and extensive bouts of warfare global wars tend to bring about abrupt permanent impacts in contrast to the temporary changes associated with most interstate wars the observed displacements are reflected in both war related and nonwar related types of expenditure and are also observed before 1900 although our findings are not universally applicable and are subject to various other qualifications they may be interpreted in general as reinforcing the need for an appreciation of the persistent centrality of war especially global war in the discontinuous growth and expansion of the modern state

is the greek budget deficit sustainable after all empirical evidence accounting for regime shifts this article re examines the sustainability of the greek budget deficit by using a formal framework based on the government s intertemporal budget constraint the empirical analysis uses annual data from 1960 to 2011 and employs traditional as well as more recent unit root and cointegration techniques that account for linear and nonlinear effects in fiscal policy actions unlike previous studies the evidence suggests that allowing for structural breaks the greek budget deficit is unsustainable the parameter after the second detected break reflects the structural deficiencies of the greek economy

different paths to the modern state in europe the interaction between warfare economic structure and political regime theoretical work on taxation and state building borrows heavily from early modern european experience while a number of european states increased centralized tax revenues during this period for others revenues stagnated or even declined and these variations have motivated alternative arguments for the determinants of fiscal and state capacity this study reviews the arguments concerning the three determinants that have received most attention namely warfare economic structure and political regime and tests them by making use of a new and comprehensive tax revenue dataset our main finding is that these three determinants worked in interaction with each other specifically when under pressure of war it was representative regimes in more urbanized commercial economies and authoritarian regimes in more rural agrarian economies that tended to better aggregate domestic interests towards state building

regional inequality in the european union does industry mix matter ezcurra r gil c pascual p and rapun m 2005 regional inequality in the european union does industry mix matter regional studies 39 679 697 the aim of this paper is to test for the respective roles of regional and sectoral factors in productivity convergence in the european union between 1977 and 1999 the methodology used for this is a new one that combines an alternative version of shift share analysis with various results quoted in the literature on personal income distribution the empirical evidence suggests that regional disparity in productivity in the european union is closely related to intrinsic differences between regions whatever the case the results that emerge also reveal the fundamental role of the country effect in accounting for regional disparities in income per worker in europe in addition our empirical results support the relevance of one sector growth models to explicate per capita income disparities in the european regions

co movement of public spending in the g7 abstract the size of government in the g7 countries in the last fifty years follows a common pattern see the left panel of fig 1 below it grows in the first three decades and then turns flat at the beginning of the nineties for all countries alike we highlight this common pattern in a dynamic factor model and argue that a satisfactory explanation for it would be desirable

deadweight costs and the size of government abstract we provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare an improvement in the efficiency of either taxes or spending would reduce political pressure for suppressing the growth of government and thereby increase total tax revenue and spending we demonstrate the similarity of the political responses to revenue shocks spending shocks changes in tax efficiency and changes in spending program efficiency empirical analysis of oil shocks intergovernmental grants and other autonomous changes in taxes or spending indicates that cause and effect is not only from spending to tax structures

comparative democracy the economic development thesis in comparative politics an established finding that economic development fosters democratic performance has recently come under challenge we counter this challenge with a dynamic pooled time series analysis of a major but neglected data set from 131 nations the final generalized least squares autoregressive moving averages estimates n 2 096 appear robust and indicate strong economic development effects dependent in part on the nation s position in the world system for the first time rather hard evidence is offered on the causal relationship between economics and democracy according to granger tests economic development causes democracy but democracy does not cause economic development overall the various tests would seem to advance sharply the modeling of democratic performance

the size of government most research on the causes of growth in government expenditure has focused on the demand for government services in this paper we argue that in fact this growth may have occurred because of changes in supply changes in technology leading to increased specialization and thus increased opportunity costs of self production have led to increased market production and increased record keeping also female labor force participation has increased both of these factors serve to reduce the efficiency cost of collecting taxes if the demand for government spending has not changed this increase in supply would lead to a larger public sector we estimate a system of simultaneous equations for the period 1929 1970 incorporating this hypothesis and the results are consistent with the theory we are able to explain virtually all of the growth of government increases in female labor force participation seems to be a very important variable in this explanation

reorganising global value chains and building innovation capabilities in brazil and india abstract this paper is concerned with global shifts in innovation power it shows that brazil and india are accumulating significant innovation capabilities most explanations concentrate on factors within these rising powers this paper concentrates on explanatory factors which have their origin in the old powers europe and usa in order to understand the build up of innovation capabilities in brazil and india it examines their linkages with firms in europe and usa concentrating on the value chains which connect them it shows how the organisational decomposition of the innovation process emanating from the old powers contributes directly and indirectly to the build up of innovation capabilities in the new powers the empirical evidence comes from the brazilian auto and the indian software industry and the value chains which link them to the united states and germany two very different industries show a core of common findings on processes which contribute to building advanced innovation capabilities in india and brazil

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

relative deprivation and economic welfare a statistical investigation with gini based welfare indices the average level of relative deprivation is considered as a measure of the economic welfare or standards of living for a society this approach yields welfare indices that are weighted combinations of the mean income and the gini coefficient there has been no systematic international comparison of these gini based welfare indices in this paper they are applied to compare relative deprivation and economic welfare using data from the luxembourg income study the asymptotic distributions of estimators of gini based welfare indices are provided under weighted sampling

does high income promote democracy the authors construct a statistical model with which to test whether the regularity that democracy is more commonly found among wealthy countries stems from a democratizing effect of high income or is due entirely to other factors such as the historical context various features of the institutional setting and simultaneity with the process of leadership change even after correcting for these many other influences the democratizing effect of income remains as a statistically significant factor promoting the emergence of democratic political institutions the authors go on to find that leaders risks of losing power rise during their time in office and that these risks are higher in more democratic countries the authors confirm the finding by burkhart and lewis beck that the democracy promoting effect of income is stronger among the european countries they suggest that high income has a more powerful democratizing effect among the southern european countries because it interacts with pressure from major trading partners to democratize this suggests a revaluation of policies designed to foster the replacement of authoritarian regimes by democratic ones through free trade

testing for the government s intertemporal budget restriction in brazil during 1823 1889 this article tests whether the government s intertemporal budget restriction was fulfilled during the brazilian imperial period 1823 1889 to accomplish this newly developed tests for cointegration with unknown structural breaks are applied it is found that government spending and government revenue are cointegrated if the effect of two unknown structural breaks is taken into account the estimated parameter vector reveals that the one by one relationship that is required for solvency does not prevail for the sub periods before and after the first break however it prevails for the sub period after the second break we interpret these findings as empirical support for the long run government solvency in brazil at the end of the imperial period

economic dependence and political democracy a cross national study this study critically examines the widely held hypothesis that a simple inverse relationship exists between economic dependence and political democracy a recent study presenting empirical evidence in support of this simple hypothesis is first criticized on methodological grounds a reanalysis of the author s data which takes these criticisms into account fails to confirm the author s original findings the simple hypothesis is then retested using other measures of economic dependence and democracy these analyses also fail to confirm the simple hypothesis finally an alternative theoretical framework for viewing the relationship between economic dependence and political democracy is developed based on the work of o donnell cordoso skidmore and kaufman although this framework is not empirically tested here it serves to highlight the weak theoretical foundation that underlies the simple hypothesis

government growth and private contributions to charity we exploit the time series properties of charitable giving to provide additional insights into the relationship between charitable contributions and government spending cointegration tests reveal a significant long run relationship between several categories of charitable giving and government spending granger causality tests provide evidence on the short run giving and spending relationship evidence suggests that charitable contributions to education respond quite differently to state and local government education expenditures versus federal government expenditures we argue that the government spending and charitable giving relationship depends on the source of government revenue how this revenue is used and the rational ignorance of private donors

the median voter model in public choice theory the changing perception by public choice theorists about the relevance of the median voter model is a result of excessive extrapolation of the conclusions of theoretical models to the real world early in the 1970s the median voter model was often accepted as implying that the output produced in the public sector was what was most preferred by the median voter this claim is excessive because the median voter model is only a model of demand aggregation under majority rule and has little to say about the supply side of the public sector in the late 1970s many scholars identified several circumstances under which the model would not apply in theory but these critiques of the model were often viewed as reasons to abandon the median voter model altogether the model went from having excessive claims that made the model appear to be more powerful than it really is to excessive claims that made the model appear to be less powerful than it really is these latter claims were often in response to the earlier claims rather than to the model appropriately applied

coordination commitment and enforcement the case of the merchant guild we interpret historical evidence in light of a repeated game model to conclude that merchant guilds emerged during the late medieval period to allow rulers of trade centers to commit to the security of alien merchants the merchant guild developed the theoretically required attributes secured merchants property rights and evolved in response to crises to extend the range of its effectiveness contributing to the expansion of trade during the late medieval period we elaborate on the relations between our theory and the monopoly theory of merchant guilds and contrast it with repeated game theories that provide no role for formal organization

the effect of innovation activities on innovation outputs in the brazilian industry market orientation vs technology acquisition strategies abstract this research investigates innovation in brazil one of the largest emerging economies in latin america more specifically we aim to understand how innovation activities conducted in brazilian industrial sectors innovation input are related to and affect innovation results innovation output the paper presents a quantitative analysis of a comprehensive nation wide government sponsored innovation survey pintec covering more than 30 000 companies and 34 industrial sectors data from pintec reports were analyzed by means of pca and 2sls regression our results show that brazilian industry tends to adopt two main opposite innovation strategies market orientation or technology acquisition the market orientation strategy prioritizes internal and external rd these activities showed a positive effect on innovation output on the other hand a technology acquisition strategy based on industrial machinery and equipment acquisition showed a negative effect on innovation output moreover our results show that innovation efforts that concentrate investments on software acquisition also generate negative results on innovation outputs our results shed light on critical aspects of innovation in the brazilian emergent economy that provide insights and contributions for both managers and policy makers

on the economics of carbon pricing insights from econometric modeling with industry level data abstract the literature which tests the porter hypothesis by studying the role of environmental policies on innovation is not only fragmented but mostly employs broad measures of environmental regulations in order to draw consensus in this literature and sufficiently incentivize the pursuit of environmental policy objectives further contributions on the economics of environmental regulations utilizing alternative methods and data are needed therefore our analysis takes the chinese national emission trading scheme ets as specific example of such a policy in the econometric analysis chinese carbon prices from this market are used and their impact on innovation is estimated using a dynamic panel data regression the main findings are that while a carbon price appears to stimulate r d intensity innovation input the boost in r d does not result into increased sales and profits for industries innovation output high energy consuming industries have higher tendencies to innovate but this takes place at the distribution and marketing stages of the value chain however since the energy requirement at these levels is less relative to the actual production stage the energy costs saving may be limited therefore to better the economics of carbon pricing in a competitive world in which risk aversion is a possibility policies which encourage energy intensive industries to innovate at the production stage would present opportunities in general these findings contribute to our understanding of innovation behavior and have the potential to stimulate new debates in the literature

does microfinance reduce income inequality this study addresses the question whether participation of the poor in microfinance contributes to reducing a country s level of income inequality using data from 70 developing countries we show that higher levels of microfinance participation are indeed associated with a reduction of the income gap between rich and poor people we also show however that the effects of microfinance on reducing income inequality are relatively small the results of this study add to the discussion on the impact of microfinance on poverty by showing that although access to microfinance does seem to improve the relative income position of the poor this improvement is modest which is probably because the use of microfinance is generally small as compared to the size of the economy of the countries in our sample microfinance should therefore not be seen as a panacea for bringing down income inequality in a significant way

a technology gap approach to why growth rates differ abstract this paper contains a discussion and test of the technology gap approach to development and growth the basic hypotheses of the theory are tested on pooled cross sectional and time series data for 25 industrial countries for the period 1960 1983 the sample includes in addition to 19 oecd countries 6 of the most important industrial economies from the non oecd area the findings of the paper confirm that there exists a close correlation between the level of economic development measured as gdp per capita and the level of technological development measured through r d or patent statistics furthermore for the group of 25 countries as a whole technology gap models of economic growth are found to explain a large part of the actual differences in growth rates both between countries and periods as expected both the scope for imitation growth in innovative activity and efforts to narrow the gap investment appear as powerful explanatory factors of economic growth however when the non oecd countries and later usa and japan are removed from the sample the explanatory power of the technology variables especially growth in innovative activity diminishes

national innovation systems and the intermediary role of industry associations in building institutional capacities for innovation in developing countries a critical review of the literature abstract developed over the past three decades the national innovation system concept nis has been widely used by both scholars and policy makers to explain how interactions between a set of distinct nationally bounded institutions supports and facilitates technological change and the emergence and diffusion of new innovations this concept provides a framework by which developing countries can adopt for purposes of catching up initially conceived on structures and interactions identified in economically advanced countries the application of the nis concept to developing countries has been gradual and has coincided in the nis literature with a move away from overly macro interpretations to an emphasis on micro level interactions and processes with much of this work questioning the nation state as the most appropriate level of analysis as well as the emergence of certain intermediary actors thought to facilitate knowledge exchange between actors and institutions this paper reviews the nis literature chronologically showing how this shift in emphasis has diminished somewhat the importance of both institutions particularly governments and the political processes of institutional capacity building in doing so the paper suggests that more recent literature on intermediaries such as industry associations may offer valuable insights to how institutional capacity building occurs and how it might be directed particularly in the context of developing countries where governance capacities are often lacking contributing to less effective innovation systems stagnant economies and unequal development

why so much stability one of duncan black s 1958 more important contributions was a classically simple proof that with complex issues and majority voting a stable outcome is unlikely this very simple proof that there would normally be no motion which can get a majority against all others and hence that any possible outcome is dominated by another has been elaborated and made more precise by later work without most improbable conditions endless cycling would be expected this is particularly true when logrolling is present as it normally is if we look at the real world however we observe not only is there no endless cycling but acts are passed with reasonable dispatch and then remain unchanged for very long periods of time thus theory and reality seem to be not only out of contact but actually in sharp conflict it is the purpose of this article to demonstrate that our existing theory when properly looked at does indeed imply a relatively stable outcome to voting in some cases however this stability will not be a true equilibrium because a random member of a large set will be chosen and then that random outcome will be left unchanged for long periods of time it does not dominate all other outcomes but is retained merely because of its particular history there are already several possible explanations for the observed stability in the literature we will take them up as they become relevant to the general line of reasoning i should however warn the reader that my own previous work including joint work with buchanan will play a major role here this may simply reflect egotism but i think that some of the early work which is now partially forgotten can provide solutions for more modern problems much recent public choice work has involved spatial models and these models frequently ignore logrolling the reason presumably is that it is very hard to put logrolling in a two dimensional diagram we shall begin considering such special models and assume that the issues are the sort that does not lead to logrolling and then turn to more complex logrolling problems with respect to the first situation in which logrolling does not occur there is already one possible explanation for the observed stability in the literature

spatial disparities in the european agriculture a regional analysis this article examines the territorial imbalances in european agriculture during the period 1980 to 2001 by means of the information provided by various methodological instruments which allow us to overcome the drawbacks of conventional convergence analysis the results obtained reveal that the regional distribution of productivity in the agricultural sector is characterized by the presence of positive spatial dependence this fact implies that the european regions in close spatial proximity register similar levels of the variable under study which highlights the relevance of geographical location in this context the empirical evidence presented also shows that regional disparities have remained almost constant during the time interval considered however the increase in density around the european average explains the observed reduction in the degree of bipolarization while intra distribution mobility is relatively limited finally the analysis carried out allows us to assess the role of variables s

the kantian peace the pacific benefits of democracy interdependence and international organizations 1885 1992 the authors test kantian and realist theories of interstate conflict using data extending over more than a century treating those theories as complementary rather than competing as the classical liberals believed democracy economic interdependence and international organizations have strong and statistically significant effects on reducing the probability that states will be involved in militarized disputes moreover the benefits are not limited to the cold war era some realist influences notably distance and power predominance also reduce the likelihood of interstate conflict the character of the international system too affects the probability of dyadic disputes the consequences of having a strong hegemonic power vary but high levels of democracy and interdependence in the international system reduce the probability of conflict for all dyads not just for those that are democratic or dependent on trade

estimating labour and output gap evidence from the athens olympic region in greece the present article estimates potential labour and labour gap as well as potential output and output gap using a cobb douglas production function and a hodrick prescott filter we investigate the athens region in greece by sector of economic activity with the aid of the non accelerating wage inflation rate of unemployment concept the results support the idea that the athens region seems to be working mostly over the regional economy s capabilities a fact which leads to inflationary pressure

integrating and testing models of rivalry duration theory previously separate explanations of rivalry termination based in political shocks security and domestic politics can be integrated in a single model of bargaining between rational decision makers who have multiple goals hypotheses from the previously separate models should be tested together hypotheses security concerns issue salience democracy and democratization regime change and political shocks affect the probability of rivalry termination and in turn rivalry duration duration dependence may also affect rivalry duration methods a parametric hazard model with a weibull specification and time varying covariates is estimated on a data set of sixty three enduring rivalries generated from the latest militarized interstate dispute data results domestic political factors and issue salience are the most likely causes of rivalry termination rivalries also appear strongly and positively duration dependent meaning that the hazard rate in rivalries increases over time and thus that rivalry termination tends to accelerate as rivalries continue findings on political shocks and security concerns are sensitive to operationalization some causal relationships appear to differ between preand post wwii rivalries

the patterns of technological capabilities of countries a dual approach using composite indicators and data envelopment analysis this study explores the patterns of technological capabilities for a sample of 42 countries over the period 1995 2007 introducing a novel methodological approach we exploit duality between data envelopment analysis and composite indicators to address the inconsistency between the two methodologies the empirical findings point to the end of the hegemony of north america western europe and japan showing that a process of convergence in technological capabilities has occurred limited to the 42 countries included in this study based on our methodology a classification is provided highlighting differences in the patterns of technological capabilities of countries

tax and spend spend and tax or fiscal synchronization new evidence for ten countries cointegration and vector autoregression are used to test the tax and spend spend and tax and fiscal synchronization for ten countries using annual time series data over the period 1951 to 1996 three of them are part of the newly industrialized countries of asia south korea taiwan and thailand and seven are industrialized countries australia canada japan new zealand south africa uk and the usa this paper includes gdp as a control variable into the model like baghestani and mcnown 1994 ross and payne 1998 and koren and stiassny 1998 the johansen 1988 and johansen and juselius 1990 cointegration test results indicate that these three variables are cointegrated with two cointegrating vectors for south korea one vector for australia canada south africa taiwan uk and the usa and no vector for japan new zealand and thailand the results from granger causality tests suggest unidirectional causality running from revenues to spending supporting the tax and spend hypoth

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

innovation and productivity in developing countries a study of argentine manufacturing firms behavior 1992 2001 abstract following the methodology employed in studies for industrialized countries and using panel data from innovation surveys in argentina with information for 1992 2001 this paper contributes to the nascent literature that analyzes the determinants of innovative inputs and outputs and their impacts on manufacturing firms productivity in developing countries the econometric results show that in house r d and technology acquisition expenditures have positive payoffs in terms of enhanced probability of introducing new products and or processes to the market in turn innovators attain higher productivity levels than non innovators the results also show that large firms have a higher probability of engaging in innovation activities and of becoming innovators

regional differences and the components of growth and inequality change abstract inequality change can be decomposed simply in terms of per capita income and population changes using the gini index an illustration based on u s data for the two intercensus periods 1960 1970 and 1970 1980 is given this decomposition analysis is also applied to the study of changes in a welfare index originally proposed by sen

innovation in times of crisis national systems of innovation structure and demand this article addresses the impact of the current economic downturn on innovation across europe using micro and macro data we investigate to what extent some structural characteristics of national systems of innovation along with demand affect firms persistency in terms of innovation investment it emerges that the effects of the economic downturn in terms of firms innovation investment are not the same across european countries the competences and quality of the human resources the specialization in the high technology sector together with the development of the financial system seem to be the structural factors which are able to offset the effect of the economic downturn on innovation investments of firms across europe finally some considerations about policies during recessions are discussed

the democratic peace and a sequential reciprocal causal arrow hypothesis one of the democratic peace puzzles is the question of whether and to what extent the democracy peace relationship underestimates the possibility that peace precedes democracy the reversed causal arrow hypothesis from a war making state making perspective democratization needs to be viewed as a partial function of external threat and domestic power concentration all three variables are found to be interrelated as predicted and related in turn to the external conflict behavior of major powers from 1816 to 1992 these monadic findings however do not appear to negate the dyadic relationship between democratization and selectively reduced conflict behavior in sum there is substantial support for the reversed causal arrow hypothesis but it does not render the regime type conflict behavior relationships spurious rather it enriches the understanding of the context in which democratization has emerged to have some effect on international politics

war and the economic growth of major powers as part of an ongoing analysis of the expansion of the international system s major powers this study examines the net impact of warfare on the economic growth of five of the system s leading state actors since 1700 a review of earlier efforts suggests the technical utility of box tiao intervention techniques it is also important to distinguish between the historical impacts of global and interstate wars as hypothesized the impact of war on economic growth is primarily temporary however the effects of interstate wars are statisticaly insignificant while global wars tend to create significant impacts the implications of these findings are discussed in terms of the lack of attention allocated to war consequences the theoretical reluctance to differentiate between types of warfare and the longer term relationships between economic and political effects of warfare

assessing the mean reversion behaviour of fiscal policy the perspective of asian countries this article investigates fiscal policy sustainability in 10 asian countries by adopting a battery of unit root tests univariate unit root tests reveal that the fiscal stance in these countries follows a nonstationary process while the opposite conclusion was drawn for the same dataset using the commonly employed panel unit root techniques by utilizing the series specific panel unit root test recently developed by breuer et al 2002 suradf seemingly unrelated regression augmented dickey fuller that allows testing for the presence of nonstationarity within individual cross sections of the panel we found that only cross sections four out of 10 countries in the panel are stationary this means that fiscal deficits in most asian countries are in violation of their intertemporal budget constraint and that the deficits are too large

aggregate economic fluctuations and regional convergence the finnish case 1988 95 this paper analyses the connection between aggregate economic fluctuations and regional productivity convergence in finland during the period 1988 95 markov chain transition matrices and mobility indices were used to examine the regional distribution of productivity the results indicated that high intra distribution mobility occurred during booms when regional convergence potential was also at its highest conversely recession years were characterized by much lower mobility and a more divergent regional pattern these findings bear important implications in terms of regional policy planning as it seems that poor regions do not manage to keep up with the rich ones during slumps whereas regional disparities diminish naturally during boom years

on the measurement of σ convergence abstract we demonstrate that two popular measures of inequality related to the discussion of convergence lead to different conclusions when used on data from penn world table the reason is that the measures assign different weights to individual countries growth performance

do intergovernmental grants create ratchets in state and local taxes a large literature on the flypaper effect examines how federal grants to states at time period t affect state spending or taxes at time period t we explore the fundamentally different question of how federal grants at time period t affect state tax policy in the future federal grants often result in states creating new programs and hiring new employees and when the federal funding is discontinued these new state programs must either be discontinued or financed through increases in state own source taxes government programs tend to be difficult to cut as goes milton friedman s famous quote about nothing being as permanent as a temporary government program suggesting that it is likely that temporary federal grants create permanent future ratchets in state taxes far from being purely an academic question this argument is why south carolina s governor mark sanford attempted to turn down federal stimulus monies for his state we examine both the impact of federal grants on future state budgets and how federal and state grants affect future local government budgets our findings confirm that grants indeed result in future state and local tax increases of roughly 40 cents for every dollar in grant money received in prior years