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

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

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

dynamic model averaging in large model spaces using dynamic occam s window abstract bayesian model averaging has become a widely used approach to accounting for uncertainty about the structural form of the model generating the data when data arrive sequentially and the generating model can change over time dynamic model averaging dma extends model averaging to deal with this situation often in macroeconomics however many candidate explanatory variables are available and the number of possible models becomes too large for dma to be applied in its original form we propose a new method for this situation which allows us to perform dma without considering the whole model space but using a subset of models and dynamically optimizing the choice of models at each point in time this yields a dynamic form of occam s window we evaluate the method in the context of the problem of nowcasting gdp in the euro area we find that its forecasting performance compares well with that of other methods

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

another reconciliation between economists and forestry experts olg arguments foresters often claim that the goal of good forest policy is to have a sustained forest yield or even a maximum sustainable yield they also claim that people wish to save a few extra trees for their children this bequest motive is not modelled in the standard approach to the optimal rotation problem in this paper we present a standard version of an overlapping generation model augmented with a simple tree technology we show in particular that the market equilibrium can be dynamically inefficient and that a bequest motive in terms of trees can correct for the overaccumulation of capital that causes the inefficiency the bequest motive also enables us to account for a harvesting intensity varying with age young people typically cut more than elderly people in spite of a perfect capital market

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

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

are any growth theories robust this article investigates the strength of empirical evidence for various growth theories when there is model uncertainty with respect to the correct growth model using model averaging methods we find little evidence that so called fundamental growth theories play an important role in explaining aggregate growth in contrast we find strong evidence for macroeconomic policy effects and a role for unexplained regional heterogeneity as well as some evidence of parameter heterogeneity in the aggregate production function we conclude that the ability of cross country growth regressions to adjudicate the relative importance of alternative growth theories is limited despite the vast amount of empirical research generated by new growth theories there is remarkably little consensus on which mechanisms are most salient in explaining cross country differences this article is designed to provide some evidence on this question by examining the robustness of empirical support for different growth the ories as determinants of both aggregate growth and its underlying components total factor productivity tfp growth and physical and human capital accumulation one reason for the lack of empirical consensus on growth determinants is that the main statistical tool in empirical studies cross country growth regressions provides very different answers depending on how the regression is specified which for this context typically amounts to the choice of control variables individual papers typically employ regressions that include modest subsets of the body of regressors that have been pro posed in the literature as a whole others employ a kitchen sink approach to evaluate the relative evidentiary support of competing growth theories in such an exercise a large number of variables are included in a regression and those variables that prove to be significant are then declared to be the important determinants of growth while the others are dismissed as unimportant rodrik et al 2002 sachs 2003

forest management under fire risk when forest carbon sequestration has value abstract we develop a multiple forest use model to determine the optimal harvest date for a forest stand producing both timber and carbon benefits under a risk of fire an empirical application is provided for a forest owner producing maritime pine in southwest of france our results indicate that a higher risk of fire will decrease the optimal rotation period on the contrary higher carbon prices increase the optimal harvesting age to investigate the contradictory effects of fire risk and carbon price on forest rotation we identify the set of carbon prices and fire risks that lead to a given rotation age we also show that forest owner s willingness to pay for a risk reduction can be substantial 37 33 euros by ha and by year to reduce the annual fire risk from 1 26 to 0 07

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

causes and effects of corruption what has past decade s empirical research taught us a survey corruption has fierce impacts on economic and societal development and is subject to a vast range of institutional jurisdictional societal and economic conditions it is this paper s aim to provide a reassessment and a comprehensive state of the art survey of existing literature on corruption and its causes and effects a particularly strong focus is put on presenting and discussing insights resulting from empirical research and contrasting recent with older findings

some theoretical results on the economics of forestry pose the value of timber from a tree is related to its age a according to a function ft and a discount rate of p 0 is given at what age should a tree or a stand of trees of the same vintage be cut down to maximize the present value of the timber content the answer to this question proposed by jevons 1871 wicksell 1911 and others can be stated as follows cut the tree at an age at which the increase in value of timber content of the standing tree over an additional unit time interval equals the interest that can be earned over an additional unit time interval if the revenue from cutting the tree is invested at an interest rate p from the point of view of the economics of forestry the above solution and indeed the above question is missing something more precisely the solution is based on the assumption that the land on which the stand of trees was growing is not used after the trees are cut down consequently it fails to encompass an important aspect of the forest rotation problem once trees are removed from a given area the land is available for new forest growth clearly the longer the felling of the existing forest is delayed the longer it takes to acquire revenues from future harvests the opportunity cost of utilizing the forest site for the existing stand of trees must be considered taking this reforestation aspect into account faustmann 1849 noted that the question to be asked is the following assuming that one had an empty tract of land and one were interested in maximizing the discounted sum of the value of timber content of trees harvested timber being evaluated at a constant price what pattern of planting and harvesting trees should one follow

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

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

failure to launch the role of land inequality in transition delays recent work in the growth literature has provided various explanations for transition delays and the great divergence this paper provides empirical support for one theory of transition delays initial land inequality our analysis is designed to elucidate the channels via which land inequality can affect long run economic performance using a new historical data set for land inequality frankema 2009 we employ duration analysis to investigate whether higher levels of land inequality lead to longer delays in the extension of primary schooling we then investigate whether such delays affect long run economic performance via their effect on contemporaneous schooling our findings suggest that land inequality is a key determinant of delays in schooling and that such delays have a significant negative impact on long run output

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

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

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

virtual price approach to short term timber supply under credit rationing abstract duality and virtual prices are used in a fisherian two period savings consumption model to simplify the analysis of nonindustrial private timber supply under credit rationing a possible way to measure the degree of credit rationing perceived by nonindustrial private forest owners is proposed slutsky type decompositions for the derivatives of the credit rationed timber supply function are calculated and the credit rationed derivatives are related to corresponding derivatives in a perfect capital market further the impact of the degree of credit rationing on the substitution and income effects of the exogenous variables are discussed and it is shown that the total effects are independent of the degree of credit rationing the results help to interpret parameter estimates of private nonindustrial timber supply functions especially if micro data are available

rough and lonely road to prosperity a reexamination of the sources of growth in africa using bayesian model averaging this paper takes a fresh look at africa s growth experience by using the bayesian model averaging bma methodology bma enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain africa s growth experience posterior coefficient estimates reveal that key engines of growth in africa are substantially different from those in the rest of the world more precisely it is shown that mining primary exports and initial primary education exerted differential effect on african growth these results are examined in relation to the existing literature copyright 2008 john wiley sons ltd

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

forestry and the bequest motive abstract with an overlapping generations model for trees and humans it is shown that in a small open timber producing economy both in a setting where the economy is planned in order to maximize an intertemporal social welfare function and in a decentralized market economy long term forest investments should be evaluated by their net present value this is so provided that the existing generation has some if even very small concern for the well being of the next generation a review of empirical studies among nonindustrial private forest owners in the u s and in sweden gives support to the suggestion that this mechanism based on a tinge of altruism may be more important in promoting long term silvicultural investments than the incentives given by existing land markets

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

occupational choice and the spirit of capitalism the british industrial revolution triggered a socioeconomic transformation whereby the landowning aristocracy was replaced by industrial capitalists rising from the middle classes as the economically dominant group we propose a theory of preference formation under financial market imperfections that can account for this pattern parents shape their children s preferences in response to economic incentives middle class families in occupations requiring effort skill and experience develop patience and a work ethic whereas upper class families relying on rental income cultivate a refined taste for leisure these class specific attitudes which are rooted in the nature of preindustrial professions become key determinants of success once industrialization transforms the economic landscape i introduction the industrial revolution was more than capital accumulation and growth it also set off a social and political transformation that redefined hierarchies in society and reshaped the distribution of income and wealth before the onset of industrialization in eighteenth century britain wealth and political power were associated with the possession of land over the course of the nineteenth century a new class of entrepreneurs and businessmen emerged as the economic elite for the most part the members of this class rose from humble beginnings and had their social origins in the urban middle classes the landed elite was left behind and eventually lost its political and economic predominance many observers of the time linked this reversal in economic fortunes to differences in values attitudes and ultimately preferences across social classes there are countless examples both in scholarly and in fictional writing of portrayals of members of the landowning class as averse to work unwilling to save ill disposed tocommercialactivity andunabletoconsidermoneyassomething

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

financialisation institutions and financing constraints in developing countries the paper uses a consistent firm level data from the world banks enterprise surveys to explore the impact of financialisation in the economy on firms access to finance in 138 developing countries access to finance reflects survey based firms perceptions of external financing constraints financialisation is proxied by consistent cross country measures of financial depth these proxies capture separately the role of bank based versus market based financing firm sector and country level information is jointly used for the analysis firm specific characteristics and economic and non economic national factors are included as controls the results show that the proxies of financialisation are broadly robust predictors of financing constraints of firms in developing countries however the magnitude of the financialisation effect varies between bank based and market based channels of financing as well as between low and high income countries and it is influenced by social institutional and religious factors

people s opium religion and economic attitudes since max weber there has been an active debate on the impact of religion on people s economic attitudes much of the existing evidence however is based on cross country studies in which this impact is confounded by differences in other institutional factors we use the worldvalues surveys to id entify the relationship between intensity of religious beliefs and economic attitudes controlling for country fixed effects we study several economic attitudes towardcooperation the government working women legal rules thriftiness andthe market economy we also distinguish across religious denominations differentiating on whether a religion is dominant in a country we find that on average religious beliefs are associated with good economic attitudes where good is defined as conducive to higher per capita income andgrowth yet religious people tendto be more racist andless favorable with respect to working women these effects differ across religious denominations overall we find that christian religions are more positively associatedwith attitudes conducive to economic growth r 2003 elsevier science b v all rights reserved jel classification a1 e0 n4 z1

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

luther and the girls religious denomination and the female education gap in nineteenth century prussia martin luther urged each town to have a girls school so that girls would learn to read the gospel thereby evoking a surge of building girls schools in protestant areas using county and town level data from the first prussian census of 1816 we show that a larger share of protestants decreased the gender gap in basic education this result holds when using only the exogenous variation in protestantism due to a county s or town s distance to wittenberg the birthplace of the reformation similar results are found for the gender gap in literacy among the adult population in 1871

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

the less extreme the more you leave radical islam and willingness to migrate summary this paper studies radical islam as a determinant of individuals willingness to migrate surprisingly despite its relevance in the political debate this topic has not been investigated empirically in the literature in order to fill this gap we develop a model of the decision to migrate focusing in particular on the role played by cultural traits more specifically we focus on radical islam as a deterrent for migration following berman 2003 we define radical islam as a set of ideologies also referred to as political islam holding that islam should guide not only personal life but also social and political life in our model more radical values imply a higher psychological cost of migrating this cost derives from the fact that connections with socio religious friends and neighbors are generally not maintained after migration thus deterring individuals from migrating mayers 2000 we then test empirically the predictions of the model using individual level data from the second 2010 11 and third 2012 14 waves of the arab barometer our results suggest that ceteris paribus more radical individuals are less willing to migrate this finding is robust to alternative specifications of the model and to the use of instrumental variables and propensity score matching aimed at addressing the potential endogeneity of radical islam the result is also qualitatively unchanged when using aggregate data on actual outflows of migrants

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

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

religions fertility and growth in south east asia through indirect inference we investigate the extent to which religions supposed pronatalism is detrimental to growth via the fertility education channel using censuses from south east asia we first estimate an empirical model of fertility and show that having a religious affiliation significantly raises fertility this effect is stronger for couples with intermediate to high education levels we next use these estimates to identify the parameters of a structural model of fertility choice on average catholicism is the most pro child religion increasing spending on children followed by buddhism while islam has a strong pro birth component redirecting spending from quality to quantity we show that pro child religions depress growth in the early stages by lowering saving physical capital and labor supply these effects account for 10 to 50 of the actual growth gaps between countries over 1950 1980 at later stages of growth pro birth religions lower human capital accumulation explaining between 10 and 20 of the gap between muslim and buddhist countries over 1980 2010

state level estimates of minimum wage effects research using state level data to estimate minimum wage effects on employment follows the textbook treatment of minimum wages assuming that minimum wages are binding and that labor markets are competitive we present an alternative method of estimating minimum wage effects using similar data that relaxes these assumptions using a disequilibrium approach applying this approach to the data and sample period used in many earlier state level studies suggests that simple state level reduced form estimates of minimum wage effects on employment depend on the sample used and may badly understate the disemployment effects of a binding minimum wage

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

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

optimal forest rotation and land values under a borrowing constraint abstract this study relaxes the assumption of perfect capital markets in the classical faustmann forest rotation model a constraint on borrowing changes all the basic properties of optimal forest harvesting instead of a constant rotation period an infinite chain of rotations is determined by a nonlinear difference equation the rotation period evolves over time and approaches a stationary rotation in finite or infinite time the length of optimal rotation timber supply and the value of forest land depend on forest owner specific factors that are normally nonexistent in rotation problems the model explains several empirical findings that cause problems for the classical versions of the faustmann model

a reassessment of the new economics of the minimum wage literature with monthly data from the current population survey we estimate the employment effects of federal minimum wage increases using monthly current population survey cps data from 1979 through 1997 we find that the empirical differences in the new minimum wage literature based on cps data primarily can be traced to alternative methods of controlling for macroeconomic conditions we argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate we consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay

construction corrupts empirical evidence from a panel of 42 countries the construction sector whether privately or publicly financed is characterized by potentially large rents and government intervention making it vulnerable to corruption consistent with this both case study and survey evidence has been provided highlighting the problem of malfeasance in this sector in this article we test the proposition that a bigger construction sector is likely to be inimical to clean government based on a panel of 42 countries over the period 1995 2011 we control for a range of potentially confounding variables and the expectation that corrupt public officials may favor the development of this sector because it increases the volume of rents available to them our empirical evidence shows that a larger construction sector will tend to increase perceptions of the extent to which public power is exercised for private gain

optimal forest rotation with in situ preferences abstract this study develops a utility maximization infinite horizon forest rotation model that includesin situvalues and the forest owner s consumption savings decision making the value of forest land becomes owner specific and depends on property rights related toin situbenefits the length of the rotation period depends e g on the wealth of the forest owner and may evolve in time a forest owner with accumulating nonforest assets never continues harvesting forever in contrast with decreasing nonforest assets the rotation period converges toward the faustmann solution in a multiple stand version of the model the harvesting decisions regarding different stands are linked together via the budget constraint and the dependence of an individual stand sin situvalue on the age structure of the whole forest numerical simulation with two stands suggests that within the class of concavein situvaluation functions the optimal solution yields convergence toward forests with increasing heterogeneity of age structures

was weber wrong a human capital theory of protestant economic history max weber attributed the higher economic prosperity of protestant regions to a protestant work ethic we provide an alternative theory protestant economies prospered because instruction in reading the bible generated the human capital crucial to economic prosperity we test the theory using county level data from late nineteenth century prussia exploiting the initial concentric dispersion of the reformation to use distance to wittenberg as an instrument for protestantism we find that protestantism indeed led to higher economic prosperity but also to better education our results are consistent with protestants higher literacy accounting for most of the gap in economic prosperity

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

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

the multidimensional effects of religion on socioeconomic development a review of the empirical literature religion plays a fundamental role in most people s lives with profound implications for socioeconomic development this survey provides a comprehensive and systematic overview of the causal mechanisms between religion and development discussed and tested in the economics literature and reviews quantitative empirical evidence on the actual effects of religion on economic and social dimensions of development we start by disaggregating the concept of religion into four religious dimensions and propose a framework to conceptualize causal mechanisms numerous mechanisms are possible but only a few uncontested findings exist religion is ambivalent vis a vis development although religious ideas can foster certain forms of human capital acquisition and labor market participation scholars have found a negative relationship between religious dimensions and both income and gender equality as well as innovation activities religious identity is also a source of labor market discrimination and has ambivalent effects on economic growth and social cohesion methodological challenges refer to the availability of fine grained data especially for developing countries the use of concepts and definitions and the lack of causal inference

model averaging in economics an overview standard practice in empirical research is based on two steps first researchers select a model from the space of all possible models second they proceed as if the selected model had generated the data therefore uncertainty in the model selection step is typically ignored alternatively model averaging accounts for this model uncertainty in this paper i review the literature on model averaging with special emphasis on its applications to economics finally as an empirical illustration i consider model averaging to examine the deterrent effect of capital punishment across states in the usa

growth empirics in panel data under model uncertainty and weak exogeneity this paper considers panel growth regressions in the presence of model uncertainty and reverse causality concerns for this purpose my econometric framework combines bayesian model averaging with a suitable likelihood function for dynamic panel models with weakly exogenous regressors and xed eects an application of this econometric methodology to a panel of countries over the 1960 2000 period highlights the diculties in identifying the sources of economic growth by means of cross country regressions in particular none of the nine candidate regressors considered can be labeled as a robust determinant of economic growth moreover the estimated rate of conditional convergence is indistinguishable from zero

does social capital matter for european regional growth abstract this paper analyzes the role of different elements of social capital in economic growth for a sample of 85 european regions during the period 1995 2008 despite the remarkable progress that social capital and european regional economic growth literatures have experienced over the last two decades initiatives combining the two are few and entirely yet to come for the post 1990s period recent improvements in data availability allow this gap in the literature to be closed since they enable the researcher to consider the traditionally disregarded eastern and central european ece regions this is particularly interesting as they are all transition economies that recently joined the european union with relatively low levels of social capital on the methodological side we follow the bayesian paradigm which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty leading to a deeper understanding of the relationships being investigated in particular we analyze three indicators of social capital namely social trust associational activities and social norms results suggest that the two former might have some implications for regional growth while social norms are a weaker predictor for growth

sorting through global corruption determinants institutions and education matter not culture abstract identifying the robust determinants of corruption among cultural economic institutional and geographical factors has proven difficult from a policy perspective it is important to know whether inherent largely unchangeable attributes are responsible or if institutional and economic attributes are at work accounting for model uncertainty we use bayesian model averaging bma to analyze a comprehensive list of 36 potential corruption determinants across 123 countries covering 87 percent of the world population the bma methodology sorts through all 68 719 476 736 possible model combinations 2 36 in order to carve out the robust correlates we then take a step toward alleviating endogeneity concerns in an instrumental variable bma framework our results indicate that cultural factors are largely irrelevant whereas particular economic and institutional characteristics matter the rule of law emerges as the most persistent predictor with a posterior inclusion probability pip in the true model of 1 00 whereas we find strong evidence for government effectiveness pip of 0 88 urbanization 0 85 and the share of women in parliament 0 80 as meaningful determinants of lower corruption levels in developing countries the extent of primary schooling enters as a powerful factor with a pip of 1 00

the value of heterogeneous property rights and the costs of water volatility the system of prior appropriation in the western unites states prioritizes property rights for water based on the establishment of beneficial use creating a hierarchy where rights initiated first are more secure i estimate the demand for security in water rights through their capitalization in agricultural property markets in the yakima river basin a major watershed in washington state all water rights are satisfied in an average year so the relative value of secure property rights is a function of water supply volatility and the costs of droughts are predominantly born by those with weak rights in aggregate security in water rights does not capitalize into property values at the irrigation district level however there is heterogeneity in the premium for secure water rights the lack of a premium for district level water security is robust to a variety of econometric methods to account for correlated district unobservables and the null result produces an economically significant upper bound on the value to water security for the district the ability for farmers to adapt to water supply volatility as well as expectations about water markets and government infrastructure investment are leading explanations for the lack of an aggregate premium these explanations are supported by the pattern of heterogeneity in the water security premium

is god in the details a reexamination of the role of religion in economic growth summary barro and mccleary 2003 religion and economic growth across countries american journal of sociology 68 760 781 is a key research contribution in the new literature exploring the macroeconomic effects of religious beliefs this paper represents an effort to evaluate the strength of their claims we evaluate their results in terms of replicability and robustness overall their analysis generally meets the standard of statistical replicability though not perfectly on the other hand we do not find that their results are robust to changes in their baseline statistical specification when model averaging methods are employed to integrate information across alternative statistical specifications little evidence survives that religious variables help to predict cross country income differences copyright 2011 john wiley sons ltd

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

bequests credit rationing and in situ values in the faustmann pressler ohlin forestry model the problem of determining the optimal time to stop the pure aging process has a 150 year history in forestry the success of the rotation model lies in the fact that it is taken to be theoretically sound empirically testable and has clear practical relevance nonetheless empirical findings show that timber supply depends on variables missing from the original formulation previous research has addressed the problem by abandoning the pure aging description of forests this study demonstrates that the optimal aging process becomes forest owner specific under imperfect land and capital markets and if the owner has in situ preferences

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

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

the state federal dichotomy in the effects of minimum wages on teenage employment in the united states abstract for the period 1984 1997 we find that state level minimum wage hikes had no negative employment impact whereas federal hikes did this dichotomy may account for the differences between the results of the new economics of the minimum wage and time series studies

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

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

the absorption of financial services in an islamic environment abstract this study examines the determinants of access to finance by firms residing in 42 islamic countries firm specific characteristics such as size sector legal status and export status are found to be robust predictors of financing constraints of firms small size firms appear to face more binding financing constraints whilst firms operating in manufacturing and focusing on exports appear to face lower constraints the auditing of accounts the location of operations and ownership structure appear significant with a varying effect on direction differences are documented on the role of firm specific characteristics between islamic and non islamic countries both the absolute and relative size of islamic bank assets is a significant predictor of firms financing constraints the results add new insights on the role of non economic institutions social and cultural factors across regions in predicting financing constraints of firms in islamic countries effective financial inclusion reform must focus on small size introverted and services oriented firms operating in some distance from the center as well as understand the divergent role of institutions social structures and culture within the islamic world

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

religion and economic performance summary this paper investigates the relationship between religion and economic performance in both cross country and within country regressions the null hypothesis that religious affiliation is uncorrelated with performance can frequently be rejected i e religion matters though the regressions do not yield a robust pattern of coefficients with respect to particular religions the results with respect to islam do not support the notion that it is inimical to growth on the contrary virtually every statistically significant coefficient on muslim population shares reported in this paper in both cross country and within country statistical analyses is positive if anything islam promotes growth