multinational operation ownership and efficiency differences in the international oil industry abstract although state involvement in market systems often leads to inefficiency this influence in the oil industry is not dwindling due to strong growth of some state oil companies based on this background there are concerns about how state firms can continue to stay relevant in the international oil industry by offsetting inefficiencies due to state control this study assesses the effects of multinational operations on the performance of oil firms this is achieved by comparing productive and scale efficiencies of state and private oil companies as well as state multinationals and private multinationals a dataset of 50 firms each year from 2001 to 2010 reveals that although multinational operation is important in reducing productive inefficiencies of state firms it does not mitigate scale inefficiencies of state owned firms state firms should therefore make multinational operations a key policy direction since this will provide a transformative agenda towards equally competing with their private counterparts however better efforts need to be paid in reducing scale inefficiencies that are pervasive among state owned oil firms providing better controls on firm size will provide better drive towards future efficient production levels

deregulation consolidation and efficiency evidence from the spanish insurance industry this paper provides new information on the effects of deregulation and consolidation in financial services markets by analyzing the spanish insurance industry the sample period 1989 98 spans the introduction of the european union s eu third generation insurance directives which deregulated the eu insurance market deregulation has led to dramatic changes in the spanish insurance market the number of firms declined by 35 average firm size increased by 275 and unit prices declined significantly in both life and non life insurance we analyze the causes and effects of consolidation using modern frontier efficiency analysis to estimate cost technical and allocative efficiency as well as using malmquist analysis to measure total factor productivity tfp change the results show that many small inefficient and financially underperforming firms were eliminated from the market due to insolvency or liquidation as a result the market experienced significant growth in tfp over the sample period consolidation not only reduced the number of firms operating with increasing returns to scale but also increased the number operating with decreasing returns to scale hence many large firms should focus on improving efficiency by adopting best practices rather than on further growth

a note on the malmquist productivity index in recent years the malmquist index has gained in popularity as a measure of productivity change we demonstrate that in the presence of non constant returns to scale the malmquist productivity index does not accurately measure productivity change the bias is systematic and depends on the magnitude of scale economies

bias in malmquist index and cost function productivity measurement in banking this paper illustrates how many prior studies ofproductivity growth in the banking industry have been overstated this occurs with both dea malmquist index and parametric stochastic cost frontier productivity measurement approaches the problem is not due to the technique used but in how it is applied it is easiest to see in the banking industry due the nature ofthe data available the bias is eliminated when all outputs and inputs are included in the analysis ensuring that the balance sheet restriction is met although simple in concept this problem and its solution have so far been neglected in the literature r 2002 elsevier science b v all rights reserved

product innovation and firm growth evidence from the integrated circuit industry applied research on growth and innovation seems to suggest that successful innovations do not significantly enhance firm growth this paper tests the hypothesis that the level of observation at which applied research is typically conducted hampers identification of a significant association between innovation and sales growth rates exploiting a unique data set we find that product innovations commercialized in the immediate past positively affect the corporate revenue streams of semiconductor companies

financial deregulation and productivity growth in banking sector empirical evidence from bangladesh this article examines the effects of regulatory reform on productivity growth in the bangladesh banking industry we use a unique balanced panel dataset comprising bank level annual data from the e

foreign bank entry deregulation and bank efficiency lessons from the australian experience abstract this study considers the impact of foreign bank entry on banking efficiency in australia during the post deregulation period 1988 2001 using data envelopment analysis malmquist indices and stochastic frontier analysis we find foreign banks more efficient than domestic banks which however did not result in superior profits major australian banks have used size as a barrier to entry to new entrants furthermore bank efficiency has increased post deregulation and the competition resulting from diversity in bank types was important to prompt efficiency improvements finally the recession of the early 1990s resulted in a distinct shift in the process of efficiency changes

income dynamics in tamil nadu india from 1971 to 2003 changing roles of land and human capital this article examines the changing role of physical and human capital in income dynamics in tamil nadu india using detailed daily records of farming households from 1971 to 2003 we find that income growth until the early 1990s is attributed to the rice green revolution and the associated development of nonrice farm sector further growth after the 1990s became possible due to the rapid nonfarm sector development that has been stimulated by the liberalization of indian economy since 1991 in accordance with this change in income structure the importance of physical and human capital has changed human capital was important in the early 1970s to take advantage of the rice green revolution technology once the new technology became standard among farmers human capital became an insignificant factor the importance of human capital has revived in a different manner in recent years firstly because it has increased farmers access to nonfarm job opportunities and secondly because farm management has become more knowledge intensive in the face of increasing scarcity of labor and water the contribution of physical capital increased during the green revolution period while it started declining after that the changing mechanism is characterized as the shifting importance from physical to human capital in accordance with the changing engines of income growth from the green revolution to the development of nonfarm sector

productivity economies and efficiency in u s agriculture a look at contracts the growing importance of production contracts especially for some livestock species and in certain regions suggests that contracts confer economic benefits on farmers this trend has however stimulated concerns about the impacts of contracting on farm structure and concentration and environmental degradation which have led to efforts by various levels of government to regulate contract production for example in the u s hog industry between 1992 and 1998 the portion of feeder pigto finish hog operations using production contracts increased from 11 to 34 while the share of output produced under contract increased from 22 to 63 key and mcbride mcbride and key recent growth in hog contracts have been particularly noteworthy in the upper midwest with 2002 contracted production accounting for 47 of the value of total farm production in iowa and minnesota compared to only about 5 in 1996 and virtually none in 1991 meanwhile production contract levels in north carolina the other center of hog production have been relatively stable production contracts offer several potential advantages over independent production that could explain their increasing prevalence such as lowering income risk for growers contracting may also raise farm productivity by improving the quality of managerial inputs speeding the transfer of technical information to growers and facilitating growers access to credit thereby permitting the adoption of newer more efficient technologies at the same time

sensitivity analysis of efficiency and malmquist productivity indices an application to spanish savings banks abstract hypothesis testing and statistical precision in the context of non parametric efficiency and productivity measurement have been investigated since the early 1990s recent contributions focus on this matter through the use of resampling methods i e bootstrapping techniques however empirical evidence is still practically non existent this gap is more noticeable in the case of banking efficiency studies where the literature is immense in this work we explore productivity growth and productive efficiency for spanish savings banks over the initial post deregulation period 1992 1998 using data envelopment analysis dea and bootstrapping techniques results show that productivity growth has occurred mainly due to improvement in production possibilities and that mean efficiency has remained fairly constant over time the bootstrap analysis yields further evidence as for many firms productivity growth or decline is not statistically significant with regard to efficiency measurement the bootstrap reveals that the disparities in the original efficiency scores of some firms are lessened to a great extent

productivity change using growth accounting and frontier based approaches evidence from a monte carlo analysis this study presents some quantitative evidence from a number of simulation experiments on the accuracy of the productivitygrowth estimates derived from growthaccounting ga and frontier based methods namely data envelopment analysis corrected ordinary least squares and stochastic frontier analysis based malmquist indices under various conditions these include the presence of technical inefficiency measurement error misspecification of the production function for the ga and parametric approaches and increased input and price volatility from one period to the next the study finds that the frontier based methods usually outperform ga but the overall performance varies by experiment parametric approaches generally perform best when there is no functional form misspecification but their accuracy greatly diminishes otherwise the results also show that the deterministic approaches perform adequately even under conditions of modest measurement error and when measurement error becomes larger the accuracy of all approaches including stochastic approaches deteriorates rapidly to the point that their estimates could be considered unreliable for policy purposes

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

a policy agenda for pro poor agricultural growth abstract sub saharan africa and parts of south asia are likely to hold large numbers of very poor rural people into the foreseeable future although both history and theory suggest a pre eminent role for agricultural growth in poverty reduction in poor agrarian economies such growth today faces new difficulties many of these difficulties are endogenous to today s poor rural areas others result from broader processes of global change but some are due to changes in the dominant policy environment emphasizing liberalization and state withdrawal examination of 20th century green revolutions suggests that active state interventions were important in supporting critical stages of agricultural market development unfortunately such interventions benefits in institutional development are easily overlooked whereas their high costs are much more visible policy implications are discussed

comparing malmquist and hicks moorsteen productivity indices exploring the impact of unbalanced vs balanced panel data abstract we explore the effect of balancing unbalanced panel data when estimating primal productivity indices using non parametric frontier estimators first we list a series of pseudo solutions aimed at making an unbalanced panel balanced then we discuss some intermediate solutions e g balancing 2 years by 2 years furthermore we link this problem with a variety of literatures on infeasibilities statistical inference of non parametric frontier estimators and the index theory literature focusing on the dynamics of entry and exit in industries we then empirically illustrate these issues comparing both malmquist and hicks moorsteen productivity indices on two data sets in particular we test for the differences in distribution when comparing balanced and unbalanced results for a given index and when comparing malmquist and hicks moorsteen productivity indices for a given type of data set the latter tests are crucial in answering the question to which extent the malmquist index can approximate the hicks moorsteen index that has a total factor productivity tfp interpretation finally we draw up a list of remaining issues that could benefit from further exploration

nonparametric estimates of the components of productivity and profitability change in u s agriculture recent theoretical advances in total factor productivity tfp measurement mean that tfp indexes can now be exhaustively decomposed into unambiguous measures of technical change and efficiency change to date all applications of this new methodology have involved decomposing indexes that have poor theoretical properties this article shows how the methodology can be used to decompose a new tfp index that satisfies all economically relevant axioms from index theory the application is to state level data from 1960 to 2004 in most states the main drivers of agricultural tfp change are found to have been technical change and scale and mix efficiency change

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

did higher inequality impede growth in rural china this paper estimates the relationship between initial village inequality and subsequent household income growth for a large sample of households in rural china using a rich longitudinal survey spanning the years 1987 2002 and controlling for an array of household and village characteristics the paper finds that households located in higher inequality villages experienced significantly lower income growth through the 1990s however local inequality s predictive power and effects are significantly diminished by the end of the sample the paper exploits several advantages of the household level data to explore hypotheses that shed light on the channels by which inequality affects growth biases due to aggregation and heterogeneity of returns to own resources previously suggested as candidate explanations for the relationship are both ruled out instead the evidence points to unobserved village institutions at the time of economic reforms that were associated with household access to higher income activities as the source of the link between inequality and growth the empirical analysis addresses a number of pertinent econometric issues including measurement error and attrition but underscores others that are likely to be intractable for all investigations of the inequality growth relationship

congressional influence on u s monetary policy abstract congressional influence is generally discounted or ignored in political models of federal reserve behavior here i show that changes in the leadership of the senate banking committee are significantly correlated with monetary base growth more liberal committee leaders are associated with significantly higher base growth other factors held constant the result is shown to hold across several econometric specifications and different definitions of the congressional preference variable

growth divergence due to spatial externalities abstract on using household level panel data to unpack a regional growth regression for rural china we find that aggregate divergence at the regional level is entirely due to external effects of community wealth at the household level

malmquist productivity index estimation with zero value variables the case of greek prefectural training councils abstract the paper suggests a technique for the parametric estimation of the malmquist productivity growth index when the dataset to be analyzed contains a considerable number of observations with zero values a dummy variable technique suggested by battese j agric econom 48 1997 250 is extended to a translog specification of the input distance function moreover technical changes tcs are decomposed into neutral and biased components and the sources of total productivity growth are computed via formulae explicitly accounting for the discrete nature of the data our approach has been applied to the greek prefectural training councils a state extension system for the general public findings indicate a considerably negative productivity growth primarily attributable to regressive tc

aggregation of malmquist productivity indexes allowing for reallocation of resources in this paper we consider aggregate malmquist productivity index measures which allow inputs to be reallocated within the group when in output orientation this merges the single period aggregation results allowing input reallocation of nesterenko and zelenyuk 2007 with the aggregate malmquist productivity index results of zelenyuk 2006 to determine aggregate malmquist productivity indexes that are justified by economic theory consistent with previous aggregation results and which maintain analogous decompositions to the original measures such measures are of direct relevance to firms or countries who have merged making input reallocation possible allowing them to measure potential productivity gains and how these have been realised or not over time

on the existence of a political monetary cycle this paper examines electoral influence on monetary policy as measured by ml money growth i find a significant four year electoral cycle in money growth even when controlling for the influence of interest rates income and budget deficits further the residual electoral cycle produces the income and inflation movements associated with the political business cycle when it is used in simulations of simple reduced form macro models the paper concludes by discussing the difficulties in rationalizing cyclical monetary policy with rational expectations

malmquist indices of productivity growth during the deregulation of norwegian banking 1980 89 productivity growth during the deregulation of the norwegian banking industry is studied within the framework of data envelopment analysis which explicitly allows for multiple outputs introducing malmquist indices for productivity growth total growth can be decomposed into frontier growth and change in each bank s distance to the frontier both the total growth index and its components can be consistently chained over time we find productivity regress at the average bank prior to the deregulation but rapid growth when deregulation took place deregulation also led to less dispersion of productivity levels within the industry

growth inequality and poverty looking beyond averages the evidence is compelling that the poor in developing countries do typically share in the gains from rising aggregate affluence and in the losses from aggregate contraction but how much do poor people share in growth do they gain more in some settings than others do some gain while others lose does pro poor growth mean more or less aggregate growth recent theories and evidence suggest some answers but deeper microeconomic empirical work is needed on growth and distributed change only then will we have a firm basis for identifying the specific policies and programs needed to complement and possibly modify growth oriented policies

productivity and efficiency of vietnamese banking system new evidence using fare primont index analysis this article aims to provide a clearer view on the recent evolutions of the vietnamese banking system that can be useful to public authority when taking restructuring decisions this article focuses on the evolution of productivity of vietnamese banks over the period 2008 to 2012 and on the evolution of the different components of this productivity technical change pure technical efficiency and mix and scale efficiency the methodology draws from very recent developments in index theory in the design of multiplicative complete economically ideal indexes using fare primont productivity indexes to measure productivity this methodology is applied to a balanced panel of vietnamese banks the results complement observations usually made on the recent development of the vietnamese banking system they show that the state bank of vietnam s restructuring policy cannot focus only on either the insufficient size of banks or a better management of these banks in terms of the mix of outputs both must be conside

comparing fourier and translog specifications of multiproduct technology evidence from an incomplete panel of french farmers selecting a functional form for a cost or profit function in applied production analysis is a crucial step in assessing the characteristics of a technology the present study highlights differences in the description of a technology which are induced by fitting a fourier or a translog cost functions on average both forms provide similar information on the technology however estimation results and statistical tests tend to favour the fourier specification this is mainly because many trigonometric terms appear to be significant in our application accordingly our results show that the fourier cost function is able to represent a broader range of technological structures than the translog the paper presents an application to the case of an incomplete panel of french farmers in the process three technical issues are addressed the missing data problem the choice of the order of approximation and the conditions ensuring asymptotic normality of fourier parameters estimates

does aggregation hide the harmful effects of inequality on growth abstract aggregation can severely bias conventional tests of whether inequality impedes growth a micro growth model estimated on farm household data for rural china indicates that asset inequality in the area of residence has a harmful external effect on consumption growth the effect is lost in a regional growth regression

on two definitions of productivity abstract caves et al in 1982 introduced a productivity measure that does not proceed from a continuous timer presentation they named these indexes after sten malmquist who in 1953 used ratios of distance functions to formulate quantity indexes in the consumer context in a later paper diewert proposed an alternative definition of productivity also based on distance functions which he attributed to hicks and moorsteen in this letter we provide necessary and sufficient conditions for the malmquist productivity index to equal the hicks moorsteen index

political parties and the business cycle in the united states 1948 1984 this paper tests the existence and the extent of a politically induced business cycle in the u s in the post world war ii period the cycle described in this paper is different from the traditional political business cycle of nordhaus it is based on a systematic difference between the monetary policies of the two parties in a model with labor contracts from an explicit optimization problem we derive a system of equations for output and money growth then we successfully test the non linear restriction imposed by the theory on the parameters of the system of equations we cannot reject the hypothesis that money growth has been systematically different under the two types of administration and that this difference contributes to explain output fluctuations

total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 1978 this article total factor productivity growth technological progress and technical efficiency change dimensions of productivity change in yugoslavia 1965 78 was reprinted with permission from the december 1982 issue of the economic journal this article proposes a methodology that decomposes total factor productivity change into two distinct elements technological progress and changes in technical efficiency technological progress is defined as the change in the best practice production frontier all other productivity change is attributed to technical efficiency change the article provides a theoretical framework for decomposing total factor productivity growth as well as a specification and estimation of the deterministic frontier production function it employs a programming technique to estimate a flexible functional form of the production frontier the paper then applies this technique to empirical data from yugoslavia of the period from 1965 to 1978 it concludes that for yugoslavia improvements to technical efficiency comprise the dominant contribution to total factor productivity change this agrees with accumulating evidence that in many developing economies productivity gain due to technological mastery of imported technology is substantial

decomposing productivity indexes into explanatory factors abstract productivity measures are increasingly regarded as key indicators of economic performance identifying sources of productivity growth is of interest to both firms and policy makers this paper revisits the debate on how to decompose productivity growth into explanatory factors with a focus on extracting technical progress technical efficiency change and returns to scale components using bjurek s concept of the malmquist index introduced into production theory in a systematic way by caves christensen and diewert a reference technology is required to define the components of interest unlike other approaches ours do not make any convexity assumptions on the reference technology but instead follows the example of tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions a new decomposition of a productivity index is provided with the existence and properties of the underlying distance functions of the decomposition proven under relatively unrestrictive assumptions the paper also provides for the first time a theoretical justification for the geometric average form of the bjurek productivity index these rigorous theoretical contributions provide significant avenues for enhanced understanding of empirical productivity performance

slowing monetary growth since 1984 a public choice explanation until about 1984 the u s monetary base typically grew at an accelerating rate since then that acceleration has stopped modern evidence suggests that the federal reserve responds to political pressure we present empirical evidence supporting the hypothesis that reduced monetary base growth reflects the fact that the political advantages of price inflation have been significantly reduced by the tax indexation provisions of the economic recovery tax act of 1981

measuring and decomposing productivity change measuring productivity change with malmquist indices has become common practice because they are easily computed using nonparametric programming techniques and can be readily decomposed into technical and efficiency change however this approach is nonstochastic and requires a constant returns to scale assumption to construct the reference technology we propose estimating productivity change using a stochastic input distance frontier imposing no restrictions on returns to scale we derive the analogous decomposition of productivity change and develop a generalized method of moments strategy in which outputs or inputs may be endogenous we compare two methods in an application to electric utilities

productivity change and decomposition analysis of japanese regional economies this study examines the productivity growth and its four components for japanese regional economies by analyzing 47 prefectures for the period 1995 2012 the productivity changes are measured by th

the impact of changes in human fertility on poverty household survey data for developing and transitional economies are used to estimate the effect of fertility crude birth rate net of infant deaths on private consumption poverty cross national regressions indicate that higher fertility increases poverty both by retarding economic growth and by skewing distribution against the poor our median country in 1980 had dollar a day poverty incidence of 18 9 per cent had it reduced its fertility by four per 1 000 throughout the 1980s the sample median fall it is estimated that incidence would have been reduced to 13 9 per cent the growth and distribution effects being roughly equally responsible for this reduction

is there a slowdown in agricultural productivity growth in south america this article estimates agricultural productivity growth in 10 south american countries in 1969 2009 with the objective of investigating if the slowdown being measured in other countries is present in the region results show that productivity growth accounts for half of the three fold increase in agricultural output during this period and that performance is sensitive to r d investments in the sector the slowdown found for the 1990s to 2000s in the u s and some european economies does not seem to be present yet in south america the region s total factor productivity tfp growth rate increased steadily from 1 07 during the 1970s to 2 29 during the 2000s given lags in adoption and the adaptive nature of innovations in these economies we have yet to see the potential effects in south american agriculture of decreases in r d in advanced economies

the malmquist total factor productivity index the definitions of the malmquist output and input quantity indexes specified by d w caves l r christensen and w e diewert 1982 are applied in this study based on these indexes a malmquist total factor productivity index is derived for general production structures the definition maintains the fundamental characteristic of a productivity index as a ratio between an output quantity change index and an input quantity change index this index provides a remedy for the shortcoming of the traditional definition of the malmquist productivity index in that the latter does not correctly measure changes in productivity in the presence of changes in returns to scale copyright 1996 by the editors of the scandinavian journal of economics

technological change and efficiency in the presence of quasi fixed inputs a dea application to the hospital sector abstract quasi fixed inputs are present in virtually all sectors of the economy and cannot be adjusted to their optimal value even in the long run this constraint must be incorporated in models to correctly measure efficiency and technological change assuming that all inputs can be freely and instantly set to their optimal level overestimates firms sectors countries capacity to adjust biases results and weakens dea method as a working tools for managers we propose a modified dea approach introducing quasi fixed inputs and apply the method to hospital emergency services in montreal to show that such limitations can be lifted

presidential elections and federal reserve policy an empirical test traditional macro economic models of federal reserve fed behavior typically assume that the fed enjoys a well defined objective function based on social welfare and generally predict counter cyclical monetary policy the increasing observation of procyclical monetary policy has led many researchers to investigate new models of fed behavior several recent papers imply that procyclical fed behavior is due to a lack of political accountability friedman 7 toma 23 and shughart and tollison 21 all attribute considerable bureaucratic discretion to the fed and seek to explain monetary policy by examining typical bureaucratic objectives other papers such as pierce 19 20 weintraub 26 and kane 10 11 argue that the fed operates in an arena filled with political constraints that cause sub optimal monetary policy but these constraints are not modeled explicitly one possible political constraint on fed behavior is the incumbent president s desire for re election in the political business cycle pbc literature presidential re election opportunities are enhanced by the production of a precise set of inflation and unemployment outcomes leading up to the election thus to the extent that presidents desire cyclical macro economic outcomes there will be executive pressure on the fed to create or accommodate such outcomes the effect this pressure will have on fed policy is ultimately an empirical question but most models deal with it by assumption traditional macro modeling assumes a zero effect while the pbc models implicitly assume that a favorable election cycle is a primary goal of all economic policymakers this paper examines presidential influence on the federal reserve by testing for an election cycle in money growth the major result is the identification of a regular 16 quarter cycle in money growth corresponding with presidential elections this cyclical effect is found to be stable over time and significant under a wide range of model specifications further when the cyclical component of money growth is used to simulate a simple macro model it produces a classic political business cycle in inflation and real output growth

elections and the fed is there a political monetary cycle to understand the political causes of macroeconomic policy it is necessary to examine the institutions that actually make such policy and the incentives those institutions face an explanation of the political causes of united states monetary policy must treat the various institutions that are influential in the monetary policy process which are at a minimum the federal reserve fed and the executive including the president the treasury department and other advisors in the executive office of the president the reelection motive has proven useful in modeling presidential incentives in this article i investigate whether electoral incentives associated with the theory of the political business cycle pbc can help to explain the behavior of the fed over the last quarter century the political business cycle has had a curious hold on modern political economy while the empirical evidence in favor of the cycle is far from overwhelming its theoretical importance leads to continuing empirical

development and application of the hicks moorsteen productivity index for the total factor productivity assessment of wastewater treatment plants abstract the assessment of the productivity change in wastewater treatment plants is essential to improve performance and reduce operational costs several indices are available to compute unit productivity however some assessments are more reliable than others in the absence of price data the malmquist productivity index is the most commonly applied but it does not maintain total factor productivity properties under variable returns to scale technology hence malmquist productivity index is not a suitable index to compute total factor productivity change in wastewater treatment plants the present study served to overcome such limitations by calculating for the first time total factor productivity changes in a sample of 204 spanish wastewater treatment plants using the hicks moorsteen productivity index it is a multiplicatively complete index which can be decomposed as several sub indices representing technical and efficiency changes therefore this study also investigated the drivers of total factor productivity change in wastewater treatment plants results showed a 5 4 total factor productivity decline per year from 2003 to 2008 in the plants analysed the primary driver in the reduction was efficiency change alternatively technical change improved during the five years of study the results of this study provide support for policymakers and managers in decision making processes and contribute to the improvement of technical and economic wastewater treatment plants performance in addition it is evidenced that wastewater treatment plants current dependence on external energy sources should be reduced to improve productivity and reduce costs to citizens who pay for wastewater treatment services

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

feasible estimation of firm specific allocative inefficiency through bayesian numerical methods both the theoretical and empirical literature on the estimation of allocative and technical inefficiency has grown enormously to minimize aggregation bias ideally one should estimate firm and input specific parameters describing allocative inefficiency however identifying these parameters has often proven difficult for a panel of chilean hydroelectric power plants we obtain a full set of such parameters using gibbs sampling which draws sequentially from conditional generalized method of moments gmm estimates obtained via instrumental variables estimation we find an economically significant range of firm specific efficiency estimates with differing degrees of precision the standard gmm approach estimates virtually no allocative inefficiency for industry wide parameters copyright 2009 john wiley sons ltd

the political economy of the peace dividend we develop a model of the peace dividend and use it to predict the fiscal consequences of a reduction in the demand for military spending the model is based on the assumption that the political process responds to political demands and costs in a way that maximizes net political benefits the predictions of our model on how a peace dividend will be allocated over nonmilitary spending tax relief and deficit reduction is tested against the experience of eight major wars in united states history

why don t we see poverty convergence average living standards are converging among developing countries and faster growing economies see more progress against poverty yet we do not find poverty convergence countries starting with higher poverty rates do not see higher proportionate rates of poverty reduction the paper tries to explain why analysis of a new dataset suggests that at given mean consumption high initial poverty has an adverse effect on consumption growth and also makes growth less poverty reducing thus for many poor countries the growth advantage of starting out with a low mean is lost due to a high incidence of poverty jel d63 i31 i32 o15

can high inequality developing countries escape absolute poverty do the poor face the same prospects for escaping poverty in high inequality developing countries as in low inequality countries is it possible for inequality to be so great as to stifle prospects of reducing absolute poverty even when other initial conditions and policies are favorable to growth household survey data for developing countries suggest that initial distribution does affect how much the poor share in rising average incomes higher initial inequality tends to reduce growth s impact on absolute poverty by the same token higher inequality diminishes the adverse impact on the poor of general economic contraction combining this evidence with that from recent investigations of inequality s effect on growth the author finds that if inequality is high enough countries that would have very good growth prospects at low levels of inequality may see little or no overall growth and little progress in reducing poverty or even a worsening on both counts the data the author uses suggest that such cases do occur the precision with which key parameters have been estimated makes it difficult to say with confidence how common such cases are but they appear to be in the minority what appear to be the best available estimates suggest that about one fifth of the spells between surveys he analyzed were cases in which poverty was rising yet positive growth in the mean and hence falling poverty is predicted at zero inequality inequality can be high enough to result in rising poverty despite good underlying growth prospects

friedman tax cuts vs buchanan deficit reduction as the best way of constraining government i introduction both milton friedman and james buchanan believe that the federal government spends more than can be justified on the basis of economic efficiency both also agree that the reason for excessive government spending is that the political process allows people to realize the benefits from government spending without fully paying the cost of that spending but friedman and buchanan are in apparent disagreement on the effectiveness of alternative approaches at constraining government by considering friedman and buchanan s apparent disagreement at the level of fiscal policy it is possible to better understand their agreement at the level of constitutional policy milton friedman has argued that a reduction in taxes and tax revenues with an increase in the budget deficit serves the useful function of restraining government spending for example friedman 1982 60 61 has written i want to cut tax rates but if the lafferites were correct in the extreme form that a particular cut in taxes increased revenue then my conclusion would be that we hadn t cut tax rates enough because what i want to cut is government revenue that s what feeds government spending what they the big spenders want is to increase taxes so they will have more money to spend and won t have to cut spending the triumph in my opinion of the tax cutting policy that president reagan has been following is that he has made the big spenders talk on his terms for the first time they have to face up seriously to cutting spending 1 in contrast james buchanan argues that reducing taxes and increasing debt financing lowers the perceived cost of government spending and consequently increases government spending for example buchanan and wagner 1977 138 139 state the replacement of current tax financing by government borrowing has the effect of reducing the perceived price of government goods and services with the result that taxpayers increase their demands for such goods and services preferred budget levels will be higher and these preferences will be sensed by politicians and translated into political outcomes in discussing the economic policy of the reagan administration william niskanen who was a member and acting chairman of the president s council of economic advisers during the reagan presidency takes note of the conflicting views of friedman and buchanan according to niskanen 1988 109 milton friedman promoted a view that tax rates should be reduced at every opportunity believing that the resulting increase in the deficit would increase pressure to reduce federal spending james buchanan expressed a directly contrary view that a tax increase would reduce spending by increasing the perceived price of government services to the current voters niskanen continues by expressing his leanings toward the buchanan view a leaning based on his own research niskanen 1978 he points out however that recent empirical work is inconclusive with some supporting friedman s position and some supporting buchanan s niskanen 1988 109 concludes his discussion of the difference of opinion between friedman and buchanan by observing that economists and politicians unfortunately do not yet share a clear understanding of these taxing spending and budget deficit relations a simple model of taxation spending and deficit determination provides a framework for examining systematically the conflict between friedman and buchanan it makes clear that the relationships among these variables cannot be determined by empirical investigation alone because both the friedman and buchanan positions emerge as special cases of a more general model it is not surprising that empirical studies can be found to support either position indeed we demonstrate that historic episodes exist which support the positions of both men ii the model political decisions like market decisions are made in response to benefits and costs