no free ride to zero emissions simulating a region s need to implement its own zero emissions vehicle zev mandate to achieve 2050 ghg targets abstract the adoption of zero emission vehicles zevs is limited by a variety of barriers some are region specific e g availability of charging infrastructure while others are global in nature e g battery prices where improvements spill over between regions this study explores regional spillover effects and ghg impacts of strong zev focused policy specifically the zev mandate in place in ten u s states zev states which requires automakers to sell a minimum amount of zevs each year we use a dynamic technology adoption model to simulate passenger vehicle sectors in north america focusing on the case of one small region british columbia covering 0 7 of the market as potentially free riding off of zev states policy covering 23 of the market results indicate that free ridership is not effective even with the zev mandate driving very high sales in zev states british columbia cannot achieve significant zev adoption without also implementing its own zev mandate further for british columbia to meet its 2050 ghg targets it may need a zev mandate in addition to complementary climate policies pushing zevs to account for 40 93 of new vehicle sales in 2050 in short regions seeking low carbon transportation likely need to implement their own stringent policies

aggregate income shocks and infant mortality in the developing world health and income are strongly correlated both within and across countries yet the extent to which improvements in income have a causal effect on health status remains controversial the authors investigate whether short term fluctuations in aggregate income affect infant mortality using an unusually large data set of 1 7 million births in 59 developing countries the authors show a large negative association between per capita gdp and infant mortality female infant mortality is more sensitive than male infant mortality to negative economic shocks suggesting that policies that protect the health status of female infants may be especially important during economic downturns

exploring the potential for energy conservation in french households through hybrid modeling although the building sector is recognized as having major potential for energy conservation and carbon dioxide emissions mitigation conventional bottom up and top down models are limited in their ability to capture the complex economic and technological dynamics of the sector this paper introduces a hybrid framework developed to assess future household energy demand in france res irf a bottom up module of energy consumption for space heating has several distinctive features i a clear separation between energy efficiency i e investment in energy efficient technologies and sufficiency i e changes in the utilization of energy consuming durables which allows the rebound effect to be assessed ii the inclusion of barriers to energy efficiency in the form of intangible costs consumer heterogeneity parameters and the learning by doing process iii an endogenous determination of retrofitting which represents trade offs between retrofit quantity and quality subsequently res irf is linked to the imaclim r computable general equilibrium model this exercise shows that compared to a 37 reduction in final energy demand achievable in business as usual in existing dwellings an additional reduction of 14 could be achieved if relevant barriers to efficiency and sufficiency were overcome

designing taxes with migration the phenomenon of rural urban migration in less developed countries has been a source of great concern over the last few years for both economists and policy makers it is widely regarded as a major cause of urban unemployment and underemployment and thus of the severe urban poverty that is observed in latin america and sub saharan africa this paper looks at tax policies that can be used to alleviate the problem of migration at the same time as raising government revenue and promoting economic efficiency the existence of unemployed and underemployed urban residents raises issues of both equity and efficiency these people are extremely poor and are contributing very little if at all to national output at first sight it would appear that both of these problems could be alleviated by employment creation schemes in urban areas however harris and todaro 1970 argue that such schemes would simply make rural urban migration more attractive thus increasing still further the number of urban unemployed therefore in the context of the harris todaro model the problem is to devise policies that alleviate urban unemployment and underemployment without encouraging rural urban migration the present paper analyses which policies are best suited to the solution of this problem in addition the paper responds to recent criticism of the harris todaro model by analysing the sensitivity of the optimal policies to a change in the specification of the migration process proposed by bhattacharya 1 985

picking winners modelling the costs of technology specific climate policy in the u s passenger vehicle sector abstract researchers debate the cost effectiveness of technology specific versus technology neutral climate policies but few quantify the differences using the case of low carbon vehicle technologies in the us passenger vehicle sector ethanol plug in electric and hydrogen we develop a technology adoption simulation model that represents increasing returns to adoption in both financial costs and consumer preferences representing uncertainty through monte carlo analysis we compare the policy costs tonne co2 out to 2050 of i a technology neutral carbon tax ii a somewhat neutral vehicle standard requiring low carbon vehicle sales but allowing competition among technologies and iii technology specific vehicle standards requiring sales of just one technology on average across simulations the carbon tax is twice as cost effective as the best vehicle standard in part because the tax more substantially affects vehicle use rates among the vehicle standards a technology specific standard that selects the right winner plug in electric vehicles is more cost effective than the neutral standard as it more quickly stimulates technology improvement however there is risk in a technology specific approach mistakenly forcing a loser technology hydrogen results in policy costs that are 2 to 5 times higher than other policies results can help policymakers trade off the costs and risks of different climate policy options

why has under 5 mortality decreased at such different rates in different countries controlling for socioeconomic and geographic factors under 5 mortality 5q0 in developing countries has been declining at about 2 7 per year a high rate of technical progress this paper adduces theoretical and empirical reasons for rejecting the usual specification of homogeneous technical progress across countries and uses a panel of 95 developing countries for the period 1970 2000 to explore the consequences of heterogeneity allowing country specific rates of technical progress sharply reduces the estimated income elasticity of 5q0 and points to country variation in technical progress as the principal source of the large cross country variation in 5q0 decline education levels and physician coverage also contribute and are less affected than income of allowing country variation in technical progress the paper concludes by decomposing 1970 2000 5q0 decline into its different sources for each country

fiscal redistribution and income inequality in latin america income inequality in latin america ranks among the highest in the world it can be traced back to the unequal distribution of assets especially land and education in the region but the extent to which asset inequality translates into income inequality depends on the redistributive capacity of the state this paper documents the performance of latin american fiscal systems from the perspective of income redistribution using newly available information on the incidence of taxes and transfers across the region the findings indicate that i the differences in income inequality before taxes and transfers between latin america and western europe are much more modest than those after taxes and transfers ii the key reason is that in contrast with industrial countries in most latin american countries the fiscal system is of little help in reducing income inequality and iii in countries where fiscal redistribution is significant it is achieved mostly through transfers rather than taxes these facts stress the need for fiscal reforms across the region to further the goal of social equity however different countries need to place different relative emphasis on raising tax collection restructuring the tax system and improving the targeting of expenditures

implications of delaying transport decarbonisation in the eu a systems analysis using the primes model abstract the transport sector decarbonisation represents an essential part of the ghg emissions reduction strategy of the eu for the 2030 and 2050 horizon the strategy presumes a far reaching structural system change towards the marketing of advanced electrified powertrains and use of energy carriers such as electricity and hydrogen that are generated in a carbon free way the decade 2020 2030 is expected to set in motion the complex process of the necessary transformation of the power generation and transport systems which mandates the successful coordination of the interrelated market actors consumers and policy makers this paper presents a systems analysis that aims to assess what would happen if the decarbonisation strategy fails to develop as anticipated during the decade 2020 2030 we refer to this timeframe as the lost decade to answer this question our analysis is based on counterfactual scenarios quantified using the primes energy systems model the analysis concludes that the decade 2020 2030 is a critical point in this transformation limited progress in the coming decade would require the adoption of stringent policy measures beyond 2030 which along with the pressure to reduce emissions in a short period are found to increase substantially the total costs of the system

small sample bias and adjustment costs the response of most stock variables e g capital housing consumer durables and prices to exogenous impulses involves a dynamic or short run reaction and a target or long run reaction the difference between these two is typically attributed to some form of adjustment cost in this paper i argue that the small sample problems of cointegrating procedures used to estimate the long run component are particularly severe when adjustment costs are important more precisely elasticity estimates will tend to be biased downward i illustrate the empirical relevance of this by showing that the target elasticity of capital with respect to its cost is severely downward biased when estimated with conventional ols cointegration procedures once this is corrected the elasticity of the u s capital output ratio to the cost of capital is found to be large and close to minus one copyright 1994 by mit press

the theory of taxation for developing countries tax policy has far reaching implications for economic development and public administration this book which presents a modern theory of public finance brings together many of the most distinguished economists who have written on the subject they provide coherent principles for tax design and a systematic framework for the analysis of practical questions of tax reform and pricing policy in developing countries the book is especially timely as countries experience increasing shortages of government revenue and the distortions brought about by poorly designed tax systems it pays particular attention to the special problems of developing countries such as the taxation of agriculture the aim throughout is to develop techniques that can be quantitatively applied given the data available and empirical case studies illustrate the methods in action the authors analyze the links between tax theory social cost benefit analysis and the pricing of publicly supplied goods and services they also explore the empirical and econometric problems of identifying the tradeoffs between equity and efficiency other topics treated include the analysis of labor markets the taxation of foreign private investment and of fuel and the pricing of education although the models used concentrate on developing countries most of the methods and discussion apply as well to the problems of more affluent countries

tax incidence analysis of developing countries an alternative view misleading conclusions can be drawn from studies of tax incidence that ignore the special features of developing countries incorporating these features can sometimes reverse the incidence pattern of taxes relative to what is often taken to be conventional wisdom even where patterns are not reversed quantitative differences can be substantial the newer views of incidence have implications for tax restructuring options being considered in several developing countries the proposed restructuring may appear to lead only to a more regressive tax system because of improper incidence analysis copyright 1991 by oxford university press

fiscal contracting in latin america summary latin america has long been characterized as a region of high income inequality in recent years however many latin american countries have seen a decrease in income inequality and poverty levels and an increase in economic mobility fiscal policies have played a role in achieving these results one important explanation for changing fiscal policies is the increasing economic and political role played by the growing middle class in shaping the level and quality of collective goods and services and the types of taxes and relative tax burdens to fund these expenditures through a process we call fiscal contracting less unequal societies may be willing to pay more in taxes for expanded relatively universal public services

the redistribution of income in canada this original study challenges the widely held belief that government policies to redistribute income have made canada a more egalitarian state the author bases his conclusions on extensive documentation of the real effect of changes in taxes transfers and government expenditures

no taxation without information deterrence and self enforcement in the value added tax abstract claims that the vat facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread vat adoption worldwide but there is surprisingly little evidence this paper analyzes the role of third party information for vat enforcement through two randomized experiments among over 400 000 chilean firms announcing additional monitoring has less impact on transactions that are subject to a paper trail indicating the paper trail s preventive deterrence effect this leads to strong enforcement spillovers up the vat chain these findings confirm that when taking evasion into account significant differences emerge between otherwise equivalent forms of taxation jel d83 h25 h26 k34 o17

electric vehicles rising from the dead data needs for forecasting consumer response toward sustainable energy sources in personal transportation abstract since standard vehicles are powered by internal combustion mechanisms that rely on fossil fuels electric vehicles that are propelled by one or more electric engines have been proposed as an alternative to promote sustainable personal transportation in this paper we propose a general demand model for vehicle purchases at the individual level assuming that the necessary microdata is available we then list the ideal microdata that would be needed for estimating this general demand model for elaborating this list we take into account the particularities of low emission vehicles with emphasis in their cost reliability environmental benefits tradeoff as well as the potentiality for evaluation of welfare improving policies related to adoption of energy efficient technologies we discuss data sources and collection strategies for the different attributes of the model especially for those characteristics that are nonstandard such as symbolic values for instance we discuss the role of range anxiety as a barrier of adoption of electric vehicles and the implied relevance of including driving range to get consumers willingness to pay for better performing electric batteries

passenger transport modal split based on budgets and implication for energy consumption approach and application in china transport will be the strongest growing energy demand sector in the future especially in developing countries like china and it needs more attention the evolution of transport structure is very important in the dynamic of transport development and therefore worth emphasis in this study a modal split model maximizing spatial welfare and constrained by travel money budget and time budget is developed this approach differs from the general econometric based approach used in most existing macro transport studies and deals with the cost and speed of transport modes as important variables explicitly the model is then applied to china s transport sector together with sensitivity test despite many data problems the decomposition of energy consumption generated from bottom up model based on this modal split identified the importance of modal split and turnover expansion in the next 30 years which should be a stronger area of focus in transportation studies

the combined incidence of taxes and public expenditures in the philippines incidence studies of fiscal policy in developing countries typically examine either the distribution of tax burdens or the incidence of public expenditures but the central issue for policymakers is the combined or net incidence of fiscal activities one reason that combined incidence studies are so rare is that they require detailed data on both taxation and public spending the authors show that the net incidence of fiscal policy in a country with average data the philippines can be estimated using a variety of data sources and tools using simplifying assumptions for 20 years the philippine economy has experienced a series of balance of payments crises triggered by fiscal crises it has had an unsatisfactory record of poverty alleviation the authors examine net fiscal incidence to find out how poverty will be affected by the rise in taxes and the cut in spending they found that 1 the incidence pattern of taxes is basically neutral contrary to expectations indirect taxes are only slightly regressive and 2 it is the pattern of expenditures that drives the combined incidence which is progressive

household welfare and co2 emission impacts of energy and carbon taxes in mexico abstract we analyse the effects of environmental taxes on welfare and carbon emissions at the household level for the case of mexico the integrated welfare environmental analysis which is based on a censored energy consumer demand system extends previous work in two ways first the estimation of a full matrix of substitution elasticities allows us to test the necessity of incorporating second order effects into the welfare analysis second the substitution elasticities derived from the demand system are used to estimate the shortrun co2 emission reduction potential we find that first order approximations of welfare effects provide reasonable estimates particularly for carbon taxes analog to evidence in other low and middle income countries the taxation of all energy items is found to be regressive with the exception of motor fuels the analysis of the emission implications of different tax scenarios indicates that short run emission reductions at the household level can be substantial though the effects depend on how revenue is recycled this effectiveness combined with moderate and manageable adverse distributional impacts renders the carbon tax a preferred mitigation instrument considering the large effect of food price increases on poverty and the limited additional emission saving potential the inclusion of ch4 and n2o in a carbon tax regime is not advisable

a note on enforcement spending and vat revenues tax compliance studies usually focus on the effect of enforce ment spending on tax evasion reliable estimates are difficult to obtain because evasion data are often suspect this note shows how ta

the determinants of mortality mortality rates have fallen dramatically over time starting in a few countries in the 18th century and continuing to fall today in just the past century life expectancy has increased by over 30 years at the same time mortality rates remain much higher in poor countries with a difference in life expectancy between rich and poor countries of also about 30 years this difference persists despite the remarkable progress in health improvement in the last half century at least until the hiv aids pandemic in both the time series and the cross section data there is a strong correlation between income per capita and mortality rates a correlation that also exists within countries where richer better educated people live longer we review the determinants of these patterns over history over countries and across groups within countries while there is no consensus about the causal mechanisms we tentatively identify the application of scientific advance and technical progress some of which is induced by income and facilitated by education as the ultimate determinant of health such an explanation allows a consistent interpretation of the historical cross country and within country evidence we downplay direct causal mechanisms running from income to health

transport mode choice by commuters to barcelona s cbd this paper analyses the determinants of travel mode choice for suburbanised commuters in barcelona spain after describing the importance of residential suburbanisation and the parallel increase in the share of private car use by commuters into the city centre a nested logit model of transport mode choice is estimated the results reveal low elasticities particularly in the case of car commuters values of travel time savings are high although within the ranges obtained in the literature it is observed that continuing suburbanisation will result in increasing the market share of rail at the expense of the private car use and mainly the bus provided that accessibility to the public transport network is maintained at present levels

a capitalization approach to fiscal incidence at the local level this paper argues that an analysis of the capitalized burdens and benefits of the local public sector offers a simple straightforward and objective computational methodology to fiscal incidence at the local level this capitalization approach represents a major departure from the highly discretionary and imprecise computational environment of the reasonable assumptions and aaron and mcguire approaches it is initially discussed both from conceptual and operational points of view and then implemented using alternate procedures major limitations of the approach are then noted a comparative perspective on fiscal incidence results based on the capitalization approach and of earlier studies on this subject is provided in the concluding section of the paper during the past two decades several important studies have been published which investigate the redistributive implications of federal provincial and local government finances in canada all the canadian studies on the subject in general follow the methodology used for similar studies in the united states these studies differ as to the shifting of tax burden assumptions and the concept of income employed and understandably their results also vary accordingly a common criticism of these approaches is that their distribution conclusions depend crucially on what incidence hypothesis is chosen musgrave and musgrave 1976 394 all these studies merely illustrate what the distribution of fiscal incidence would be if the incidence assumptions were true the numerical es

incidence analysis of a sector specific minimum wage in a two sector harris todaro model in this paper we explore the incidence of a sector specific minimum wage in a two sector harris todaro model with intersectorally mobile capital in addition to the output and substitution effects in harberger s tax incidence analysis an additional effect reflecting the endogenously generated unemployment arises in the harris todaro case we also explore the functional incidence issue numerically for mexico by using general equilibrium computational techniques in a number of the calculations reported capital more than bears the income loss from unemployment caused by the sector specific minimum wage

wealthier is healthier we estimate the effect of income on health using cross country timeseries data on health infant and child mortality and life expectancy and income per capita we use instrumental variables estimates using exogenous determinants of income growth to identify the pure income effect on health isolated from reverse causation or incidental association the long run income elasticity of infant and child mortality in developing countries lies between 0 2 and 0 4 using these estimates we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s

the costs of carbon sequestration a revealed preference approach increased concem by policy makers with the threat of global climate change has brought with it considerable attention to the possibility of encouraging the growth of forests as a means of sequestering carbon dioxide national academy of sciences nas 1992 james p bruce et al 1996 1 the kyoto protocol to the united nations framework convention on climate change 1997 which establishes emission reduction targets for the united states and other industrialized nations states that carbon sequestration can be used by participating nations to achieve their targets moreover even before the kyoto agreement this approach had become an explicit element of both u s and intemational climate policies u s department of energy 1991 united nations general assembly 1992 william j clinton and albert gore 1993 this high level of interest has been due in part to suggestions that sufficient lands are available to use the approach to mitigate a substantial share of annual carbon dioxide c02 emissions greg marland 1988 daniel a lashof and dennis a tirpak 1989 mark c trexler 1991 and claims that growing trees to sequester carbon is a relatively inexpensive means of combating climate change roger a sedjo and allen m solomon 1989 daniel j dudek and alice leblanc 1990 nas 1992 in other words the serious attention given by policy makers to carbon sequestration can partly be explained by implicit assertions about respective marginal cost functions i develop and demonstrate a method by which the costs of carbon sequestration can be estimated on the basis of evidence from landowners behavior when confronted with the opportunity costs of alternative land uses the simplest of previous economic analyses derived single point estimates of average costs associated with particular sequestration levels marland 1988 sedjo and solomon 1989 dudek and leblanc 1990 edwin s rubin et al 1992 omar masera et al 1995 often it has been assumed that land opportunity costs are zero g van kooten et al 1992 j k winjum et al 1992 new york state energy office 1993 robert k dixon et al 1994 another set of studies essentially engineering costing models has constructed marginal cost schedules by using information on revenues and costs of production for altemative uses on representative types or locations of land and then sorting these in ascending order of cost robert j moulton and kenneth r richards 1990 richards et al 1993 simulation models include a model of the lost profits due to removing land from agricultural production peter j parks and ian w hardie 1995 a mathematical programming model of the agricultural sector and the timber market richard m adams et al 1993 a related model incorporating the effects of agricultural price support programs j m callaway and bruce mccarl 1996 and a dynamic simulation model of forestry susan swinehart 1996 lastly an analysis by andrew j plantinga 1995 adopts land use elasticities from an econometric study to estimate sequestration costs we draw on some of the best features of the previous studies including the carbon levelization method of moulton and richards john f kennedy school of government harvard university 79 john f kennedy street cambridge ma 02138 and resources for the future richard newell supplied excellent research assistance and valuable comments on a previous version were provided by lawrence goulder william nordhaus andrew plantinga kenneth richards two anonymous referees participants in seminars at the universities of california at los angeles and santa barbara the university of maryland the university of michigan the university of texas harvard university stanford university yale university resources for the future and the national bureau of economic research the author alone is resdonsible for any errors 1 after fossil fuel combustion deforestation is the second largest source of carbon dioxide emissions estimates of annual global emissions from deforestation range from 0 6 to 2 8 billion tons compared with slightly less than 6 0 billion tons annually from fossil fuel combustion cement manufacturing and natural gas flaring combined r a houghton 1991 t m smith et al 1993

growth empirics a panel data approach a comment this paper comments on recent developments in the literature on the econometric analysis of international growth and convergence it notes that panel estimates of the neoclassical model accommodating level effects for individual countries through heterogeneous intercepts deal with some of the econometric difficulties arising in some of the earlier cross sectional studies but it notes that in dynamic panels heterogeneity in growth effects and in speeds of convergence renders this estimator inconsistent also the pervasiveness of such heterogeneity is demonstrated in three samples of countries and the effects of incorrectly imposing homogeneity on estimated parameters are illustrated and discussed

taxes and income distribution in chile some unpleasant redistributive arithmetic abstract this paper quantifies the direct impact of taxes on income distribution at the household level in chile and estimates the distributional effect of several changes in the tax structure we find that income distributions before and after taxes are very similar gini coefficients of 0 488 and 0 496 respectively moreover radical modifications of the tax structure such as raising the value added tax from 18 to 25 or substituting a 20 flat tax for the present progressive income tax affect the after tax distribution only slightly we present some arithmetic showing that the scope for direct income redistribution through progressivity of the tax system is rather limited by contrast for parameter values observed in chile and possibly in most developing countries the targeting of expenditures and the level of the average tax rate are far more important determinants of income distribution after government transfers thus a high yield proportional tax can have a far bigger equalizing impact than a low yield progressive tax moreover a simple model shows that the optimal tax system is biased against progressive taxes and towards proportional taxes with a bias that grows with the degree of inequality of pre tax incomes our results suggest that to reduce income inequality the focus of discussion should be on the amount to be redistributed the targeting of public spending and the relative efficiency of alternative taxes and not on the progressivity of the tax system

controls and the intersectoral terms of trade the indian case sectors the indian economy is substantially insulated from outside market forces and the direction of movement of the intersectoral terms of trade has therefore been regarded as having special policy importance industry is equated with the urban modern sector agriculture with the rural traditional sector while the debate on the north south terms of trade following singer i 950 and prebisch i 964 has prompted discussion of international trade arrangements between developing and developed economies the debate on the intersectoral trade seems to have played a comparable role in india 2 if growth as with singerprebisch causes a deterioration in the terms of trade of the traditional sector then policy measures to offset the associated redistributive effects are seen in india as justified these can take the form of subsidies to agriculture maintenance of the current tax free status of agriculture and other measures equally since extensive redistribution through tax transfer schemes is administratively infeasible an improvement in the agricultural industrial terms of trade in favour of agriculture is often seen as a substitute for other redistributive measures poverty is concentrated in rural areas and manipulating the terms of trade in favour of agriculture through price controls subsidies and the like is a widely supported policy stance in this paper we argue that existing statistical studies of the intersectoral terms of trade in india are misleading since they typically focus on the terms of trade at controlled prices price and other controls in india are so extensive that black market rather than controlled prices should clearly enter any assessment of changes in the intersectoral terms of trade we also argue that the problem with these studies is analytically deeper than simply whether black market or controlled drices should be used because of

a systematic assessment of the environmental impacts of transport policy this paper presents an integrated urbanpassenger transport model system for evaluatingthe impact of a large number of interrelatedpolicy instruments on urban travel behaviourand the environment the model system has fourintegrated modules defining household locationand automobile choices commuter workplace andcommuting travel choices non commuting travelactivity and worker distributed workpractices the demand model system estimatedas a set of discrete and continuous choicemodels is combined with a set of equilibratingcriteria in each of the location automobileand commuting markets to predict overall demandfor passenger travel in various socio economicsegments automobile classes and geographiclocations we illustrate the diversity of thesystem by applying the integrated system toperth western australia in the context ofassessing their impacts on greenhouse gasemissions the model system is embedded withina decision support system to make it anattractive suite of tools for practitioners

business organisations party systems and tax composition in developing countries a comparison between colombia and peru abstractthis paper explores the relationship between socio political institutions and tax composition in developing countries it argues that strong business organisations and stable political party systems reduce the uncertainty of fiscal contracts for economic elites the decrease in uncertainty leads elites to accept a larger share of the tax burden which governments then collect using progressive tax types more intensively to illustrate this claim i provide evidence from a comparative analysis of the peruvian and the colombian tax history between 1970 and 2010

is democracy good for the poor many scholars claim that democracy improves the welfare of the poor this article uses data on infant and child mortality to challenge this claim cross national studies tend to exclude from their samples nondemocratic states that have performed well this leads to the mistaken inference that nondemocracies have worse records than democracies once these and other flaws are corrected democracy has little or no effect on infant and child mortality rates democracies spend more money on education and health than nondemocracies but these benefits seem to accrue to middle and upper income groups

human development in poor countries on the role of private incomes and public services development is often taken to mean rising incomes discussions of the goals of development now often emphasize the reduction of poverty rather than raising average incomes per se the role of social services particularly basic health and education has also received greater emphasis in the 1980s viewed mainly as instruments for raising the incomes of the poor but in all these approaches income growth of one sort or another is what development is all about a rather different view of the meaning of development has recently found expression in the 1990 human development report hrd produced by the united nations development programme a conceptual underpinning for this approach can be found in the work of amartya sen the essence of this view is that human development what people can actually do and be is the overriding purpose of economic development underdevelopment is viewed as the lack of certain basic capabilities rather than lack of income per se we do not aim here to advocate one of these approaches over the other but rather to explore their implications for development policy for instance what does the human development approach imply about the role of economic growth and in particular about reducing income poverty should development priorities shift toward the provision of public services in poor countries even if such a shift is at the expense of income growth

tax evasion inflation and stabilization abstract this paper focuses on the public resort to tax evasion in developing countries as an adjustment tactic during economic downturn we show using a theoretical model of intertemporal consumption that tax compliance declines when current income declines expectations about future income improve or inflation rises we then apply the model empirically to the cases of argentina brazil and chile three countries which have long experience with tax evasion and inflation over the last 40 years and find confirmation

improving behavioral realism in hybrid energy economy models using discrete choice studies of personal transportation decisions hybrid energy economy models combine top down and bottom up approaches to explore behaviorally realistic responses to technology focused policies this research uses empirically derived discrete choice models to inform key behavioral parameters in cims a hybrid model the discrete choice models are estimated for vehicle and commuting decisions from a survey of 1150 canadians with the choice models integrated into cims we simulate carbon taxes gasoline vehicle disincentives and single occupancy vehicle disincentives to show how different policy levers can motivate technological change we also use the empirical basis for the choice models to portray uncertainty in technological change costs and emissions

could higher taxes increase the long run demand for capital theory and evidence for chile abstract on theoretical grounds alone there is no a priori reason why higher taxes should reduce the desired capital stock since a tax increase reduces marginal returns but also increases depreciation and interest payment allowances using a panel of chilean corporations this paper estimates a long run demand for capital valid for a general adjustment cost structure changes in the corporate tax rate are found to have no effect on the long run demand for capital furthermore when making investment decisions firms ignore the marginal rates paid by their stockholders suggesting the presence of a corporate veil

cost effectiveness of greenhouse gas mitigation in transport a review of methodological approaches and their impact abstract a review is given of methodological practices for ex ante cost effectiveness analysis cea of transport greenhouse gas ghg mitigation measures e g fuel economy and co2 standards for road vehicles in the us and eu besides the fundamental differences between different types of policies and abatement options which inherently result in different cea outcomes differences in methodological choices and assumptions are another important source of variation in cea outcomes fourteen methodological issues clustered into six groups are identified on which thirty three selected studies are systematically reviewed the potential variation between lower and upper cost effectiveness estimates for ghg mitigation measures in transport resulting from different methodological choices and assumptions lies in the order of 400 per tonne co2 eq the practise of using cea for policy making could improve considerably by clearly indicating the specific purpose of the cea and its strengths and limitations for policy decisions another improvement is related to the dominant approach in transport ghg mitigation studies the bottom up financial technical approach which assesses isolated effects implying considerable limitations for policy making a shift to welfare economic approaches using a hybrid model has the potential to establish an improved assessment of transport ghg mitigation measures based on realistic market responses and behavioural change

international charity for the poor i introduction charities transfer billions of dollars annually to help people in other countries survive famines and other hardships due to natural and man made disasters such as droughts and civil wars in this article we address the difficulties charities have ensuring the survival of the life threatened poor overseas without exacerbating income inequality encouraging free riding or undermining recipient countries incentives to invest in the kinds of public works that could reduce their needs international charitable activities are subject to moral hazard principal agent and adverse selection problems due to information asymmetries thus too little charity can go to the truly needy and too much to countries that exaggerate their needs and or shirk indeed the empirical literature is rich with evidence of these effects for example lele and jain 1991 ruttan 1993 kanbur et al 1994 maren 1997 and the world bank 1998 document the disincentive effects of aid alesina and weder 1999 show that more aid goes to countries that are more corrupt cashel cordo and craig 1997 provide empirical evidence that the more aid a country receives the less it taxes cashel cordo and craig 1997 found statistically significant evidence of an inverse relationship between the amount of soft aid grants received and the amount of tax revenues subsequently collected by recipient governments in addition to this evidence of shirking they also found significant evidence of fungibility in which the recipient government spends released funds on other nontargeted budget items furthermore they show that donors appear to be complicit in this fungibility larger soft aid is associated with higher institutional spending such as for public administrators salaries inflows of hard aid loans targeted explicitly to economic development or public works projects show up in expanded spending on social services not expanded investment in public works alesina and weder 1999 found statistically significant evidence of a positive relationship between the share of aid in a government s budget and corruption they argued that high corruption may imply that domestically raised public resources are low and that a higher fraction of public resources are covered by foreign aid 14 also according to tornell and lane s 1999 voracity effect when power over redistributive mechanisms is highly concentrated aid encourages shirking by recipient governments thus in this article we model charities that expect recipients to reallocate revenues but not to reduce tax collections or spending on public works to formally analyze this international income transfer problem we apply the mechanism design techniques of laffont and tirole 1986 that have proven very useful in the design of domestic income maintenance programs there is a long tradition of optimal tax income maintenance program design literature about how aid encourages personal choices that are socially inefficient or self enriching see for example mirlees 1971 besley and coate 1992 or crane 1996 the key issue is that participants may reduce work effort or migrate to qualify for more benefits the impacts of information asymmetries on domestic program costs and implementation are also well known as in besley and coate 1991 1995 but with the exception of besley and coate 1998 the emphasis in that literature is on the design of domestic policies with respect to the incentives of individuals in this article we focus on charity with respect to the incentives of national governments our work on this problem is motivated by the desire to design programs that can address acute life threatening poverty defined as the inability to acquire the level of consumption goods necessary for life as in sen 1985 or ravaillon 1997 we assume that the charitable objective is that everyone has at least a minimum income

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

the neighbor effect simulating dynamics in consumer preferences for new vehicle technologies abstract understanding consumer behaviour is essential in designing policies that efficiently increase the uptake of clean technologies over the long run expert opinion or qualitative market analyses have tended to be the sources of this information however greater scrutiny on governments increasingly demands the use of reliable and credible evidence to support policy decisions while discrete choice research and modeling techniques have been applied to estimate consumer preferences for technologies these methods often assume static preferences this study builds on the application of discrete choice research and modeling to capture dynamics in consumer preferences we estimate canadians preferences for new vehicle technologies under different market assumptions using responses from two national surveys focused on hybrid gas electric vehicles and hydrogen fuel cell vehicles the results support the relevance of a range of vehicle attributes beyond the purchase price in shaping consumer preferences towards clean vehicle technologies they also corroborate our hypothesis that the degree of market penetration of clean vehicle technologies is an influence on people s preferences the neighbor effect finally our results provide behavioural parameters for the energy economy model cims which we use here to show the importance of including consumer preference dynamics when setting policies to encourage the uptake of clean technologies

some calculations of lifetime tax incidence this paper reports a set of lifetime tax incidence calculations using a life cycle simulation model for canada due to davies 1979a 1982 a repeatedly stated qualification to annual calculations in the empirical tax incidence literature is that it would be more satisfactory to make calculations on a lifetime basis even though it is acknowledged that lifetime tax incidence could well differ from annual it is widely believed that data and other difficulties make such calculations next to impossible indeed the widespread acceptance of the data problems of lifetime calculations seems also to have inhibited speculation about how lifetime tax incidence might differ from annual as a result redistributive tax policy judgments continue to be based on annual incidence calculations in spite of the reservations many have about their usefulness our paper is intended to reorient discussion towards lifetime tax incidence by providing some initial null hypotheses about the shape of lifetime tax profiles our main finding is that under the standard competitive assumptions common in the incidence literature lifetime and annual incidence calculations both produce mild progression in tax rates across household deciles ignoring the bottom decile in the annual calculation while the income tax is less progressive in lifetime than in annual calculations other taxes are for the most part less regressive also lifetime incidence calculations are much more robust to alternative shifting assumptions than annual calculations in the lifetime context key distributions such as earnings transfer payments and consumption are less heavily concentrated in particular percentiles of the population than is true in annual data as a result changing the allocative series for any particular tax does not have the large effect on incidence results found in annual calculations each component of the tax system is allocated to households grouped by lifetime income using particular distributive series following a procedure similar to that employed in annual incidence calculations for example richard musgrave et al 1974 joseph pechman and benjamin okner 1974 edgar browning and william johnson 1979 w irwin gillespie 1980 in the process we are able to compare lifetime and annual incidence calculations using the same data set in both lifetime and annual calculations we allocate five groups of taxes among households using distributive series which come partly from the 1971 statistics canada survey of consumer finances scf and partly from our life cycle simulation model the scf data are used to construct synthetic longitudinal lifetime profiles of earnings and transfer payments for a sample of 500 households the latter are assigned inheritances by simulating patterns of mortality and bequest these data are then used in the life cycle model to generate lifetime consumption profiles and bequests the earnings transfer and inheritance data plus the model output provide the distributive series on which alternative incidence calculations are based while the incidence calculations presented in this paper use canadian data results would likely be similar for the united states

interactions between trade policies and domestic distortions in a small open developing country abstract this paper reports results from a price taking open economy numerical general equilibrium model of the philippines whose purpose is to explore the ways in which trade policies and other domestic distortions interact in a small open developing economy the trade policies featured in the model include tariffs export taxes and import quotas while the domestic distortions considered are rent seeking and harris todaro labour market dualism results clearly indicate that interactions between trade policies and other domestic distortions are significant and need to be more fully considered in numerical economic policy analyses for developing countries

globalization and developing countries a shrinking tax base abstract this paper evaluates the impact of globalisation on tax bases of countries at varying stages of development we see globalisation as a process that induces countries to embrace greater trade and financial integration this in turn should shift their tax revenue from easy to collect taxes tariffs and seigniorage towards hard to collect taxes value added and income taxes we find that trade and financial openness have a positive association with the hard to collect taxes and a negative association with the easy to collect taxes

do green tech policies need to pass the consumer test the case of ethanol fuel abstract this paper investigates a question sometimes overlooked by policymakers and regulators namely the need of a robust value proposition for green technologies to successfully enter the market in particular results from consumer choice models are used to develop measures of consumer acceptance of ethanol blends and flex fuel vehicles is studied a fuel vehicle system that has received attention in a variety of federal and state policies the analysis suggests that under projected fuel prices and given the characteristics of the competing vehicle fuel systems consumers are unlikely to substitute ethanol blends for gasoline the analysis also highlights the need for further research in this area