property rights externalities and resource degradation locating the tragedy abstract resource degradation in the third world is largely driven by the demands of farm households for fuelwood and land for agriculture since resources are often controlled through indigenous systems of property the tragedy of the commons has been used to explain resource degradation as a result private property is suggested as a solution to resource degradation a dynamic model capable of examining household incentives for resource use under private and common property is developed results of the model reject the conventional wisdom that gives rise to the presumed optimality of private individual property in natural resources and the correlated indictment of group management regimes

collective action and group heterogeneity voluntary provision versus selective incentives several studies have concluded that heterogeneity within a group facilitates the initiation of collective action however a recent analysis found that heterogeneity can either facilitate or impede collective action depending on factors like the strength of the temptation to free ride reconciling these conclusions is difficult because the earlier studies assumed that public goods are provided voluntarily whereas the later analysis assumed that selective incentives like norms or laws can mandate cooperation i examine the link between group heterogeneity and collective action in three regimes voluntary systems in which actors make unrestricted decisions to participate in collective action compliance systems in which actors create and enforce norms that compel others to participate in public goods production and balanced systems in which actors can create and enforce compliance norms or oppose such norms the analysis reveals a complex link among group heterogeneity collective action and the type of regime by fostering the organization of previously atomized groups and weakening the cohesion of highsolidarity groups heterogeneity in contribution costs and valuation of the public good can reduce social power differentials

sustainability of current account deficits in india an intertemporal perspective this study examines the sustainability of current account deficits cads and the validity of intertemporal budget constraint ibc in india the long run model is estimated on annual data for the period 1950 1951 to 2009 2010 the optimal single equation and maximum likelihood ml system estimates of the model provide a consistent support for the long run relationship between imports and exports the olsgh estimates provide no support and that ml system estimates a consistent support for cointegration in both the models estimated with one and two structural breaks in level the new cointegration breakdown tests generally suggest that the cointegration prevails from 1951 to 2010 the evidence supporting the cointegration between imports and exports overwhelms the evidence providing a mixed or no support for cointegration the estimates of slope parameter above zero and the dominant support for cointegration between imports and exports vindicate the validity of ibc and the sustainability of cads the shor

testing intertemporal budget constraints theory and applications to u s federal budget and current account deficits this paper extends previous tests of intertemporal budget balance and present value relationships by expanding the set of allowable deficit processes and by deriving a testable condition that is sufficient to ensure intertemporal budget balance as long as the expected discount rate is strictly positive using these tests the authors find that both the postwar federal budget deficit process and the process governing accumulation of u s assets by foreigners are consistent with intertemporal budget balance copyright 1991 by ohio state university press

conceptualising environmental collective action why gender matters this paper demonstrates how institutions for natural resource management such as community forestry groups which appear to be participative equitable and efficient can be found lacking on all three counts from a gender perspective it also examines possible gender differences in social networks values and motivations although there is little to suggest that women are inherently more conservationist than men the distinctness of women s social networks embodying prior experience of successful cooperation their higher dependence on these networks as also on the commons in general and their potentially greater group homogeneity relative to men could provide an important and largely ignored basis for organising sustainable environmental collective action the paper also outlines the factors that can constrain or facilitate women s participation in formal environmental management groups illustrative examples are drawn from rural south asia

the ambiguous impact of inequality on local resource management abstract the impact of inequality on the ability of human groups to undertake successful collective action is investigated with special reference to overexploitation of common property resources in voluntary provision problems on the one hand inequality has an ambiguous impact on the feasibility of the efficient outcome even though better endowed agents contribute more to collective action in regulated settings on the other hand inequality tends to reduce the acceptability of available regulatory schemes and therefore to make collective action more difficult

head enders as stationary bandits in asymmetric commons comparing irrigation experiments in the laboratory and the field abstract the emergence of large scale irrigation systems has puzzled generations of social scientists since they are particularly vulnerable to selfish rational actors who might exploit inherent asymmetries in the system e g simply being the head ender or who might free ride on the provision of public infrastructure as part of two related research projects that focus on how subtle social and environmental contextual variables affect the evolution and performance of institutional rules several sets of experiments have been performed in laboratory settings at arizona state university and in field settings in rural villages in thailand and colombia in these experiments participants make both a decision about how much to invest in public infrastructure and how much to extract from the resources generated by that public infrastructure with both studies we find that head enders act as stationary bandits they do take unequal shares of the common pool resource but if their share is very large relative to downstream participants shares the latter will revolt therefore for groups to be successful head enders must restrain themselves in their use of their privileged access to the common pool resource the comparative approach shows that this result is robust across different social and ecological contexts

what explains collective action in the commons theory and evidence from the philippines summary i examine the factors that influence collective action in the commons using econometric analyses on a data set of 1958 irrigation associations in the philippines i find that collective action is associated with water scarcity proximity to markets group size farm size and governance structure water scarcity has a curvilinear effect on collective action and is mediated by the governance structure the results suggest the need for a diagnostic approach in the analysis of institutional arrangements in diverse socio ecological settings these also suggest that collective action in the commons is more complex than is conventionally assumed in the decentralization literature

coping with change a study of local irrigation institutions in taiwan abstract this paper examines how taiwan s local irrigation institutions have evolved and changed amid rapid political economic development in the last decade based upon the literatures of institutional analysis and common pool resource management i discuss and compare how local irrigation institutions in three areas in the country have responded or failed to respond to the changing environment a major finding is that local self governing irrigation institutions are not doomed to fail amid economic development several variables affect the incentives and capacity of farmers to redesign their local institutions to cope with the changes in the macro setting particularly flexible status quo institutions and a conductive governance regime can better facilitate farmers rule crafting efforts

learning theory and the logic of critical mass the oliver marwell theory of critical mass is a prominent solution to the free rider problem that plagues collective action in large groups i reformulate the theory as a stochastic learning model in which cooperative responses are shaped by the social sanctions and cues generated by the responses of others this relaxes four assumptions in the original formulation that the actors are rational decisions are isolated events outcomes are deterministic and public goods have pure jointness of supply and collective profit computer simulations then show how adaptive actors become trapped in a suboptimal equilibrium and how they escape through attainment of critical mass start up problems arise from accommodation to social costs and not from low returns to early contributors as previously believed simulations also identify a new dilemma of group size and show why solidarity tends to emerge in response to crisis finally normative solidarity appears to be a consequence rather than cause of critical mass but may promote recovery from random deviance

local common property exploitation with rewards this paper analyzes coalition formation in a livestock pasture system where livestock are privately owned and the pasture is a common property while standard models predict rather low prospects of cooperation this paper introduces a cost advantage of cooperation based on saami reindeer herding that may explain higher coalition participation in contrast to the existing fishery literature on coalition formation all players are assumed ex ante homogenous but may differ ex post due to the cost advantage a stable equilibrium with cooperation can be reached and a moderate exploitation level can be sustained compared to the tragedy of the commons outcome

distinguished fellow mincering labor economics jacob mincer has helped set the research agenda and professional style in labor economics for over 30 years his research helped uncover the empirical content of human capital theory where he used those ideas to study the determinants of earnings and the sources and nature of earnings inequality he was also a pioneer in studying labor force participation decisions of married women for the past decade jacob has set his characteristic stamp on the empirical study of job mobility the following brief survey is meant to convey some of the flavor of jacob mincer s work and why it has been so influential in labor economics

agricultural graduate earnings the impacts of college career and gender survey data were used to identify determinants of starting and current salaries of agricultural graduates from kansas state university from 1976 97 salaries were significantly influenced by major field advanced degrees job location gender and family variables motivation for accepting a job and job mobility salary structures were estimated separately for male and female alumni women earned less than men after controlling for observed differences between the two groups decomposition of the salary differential revealed that gender salary differences were primarily due to differences between sexes in starting salaries field of study job experience and higher returns to married men careers of agricultural alumni have changed rapidly over the past several decades as the food economy has entered the information age goodman employers of agricultural graduates have increased their emphasis on computer people and teamwork related skills litzenberg and schneider andelt barrett and bosshamer given the major changes in the career expectations and experiences of agricultural alumni up to date information on salaries and career experiences is a vital ingredient for sound forward looking college and career decisions the purpose of this study is to identify and quantify the determinants of both starting and current august 1997 salaries of agricultural alumni with the use of a large survey sample of twenty two graduating classes 1976 to 1997 from the college of agriculture at kansas state university ksu this recent and extensive sample provides new insight on how starting salaries have changed over time and how sal

the uncommon insight of elinor ostrom author s bergstrom ted abstract this article was written in celebration of eleanor ostrom s nobel prize standard economic approaches to the problem of overuse of common property resources have emphasized two competing remedies the pigovian approach of corrective taxation and the property rights approach of internalizing externalities by means of assigning marketable property rights to individual owners with exclusive claim on the entire commons elinor ostrom pursues a third approach which is based on case studies of existing communities that have established successful and durable systems of managing common property resources this paper discusses her work and suggests that economists with an interest in public policy have much to gain from becoming familiar with the work of ostrom and her co authors

enforcement for sale lobbying for water in pakistan s indus basin abstract surface irrigation is a common pool resource subject to over exploitation by upstream users we ask to what extent state enforcement of de jure water allocations designed to ensure adequate irrigation to downstream users is up for sale unique data on the land ownership of nearly a quarter million irrigators in pakistan s vast indus basin watershed provide a measure of political influence consistent with an influence driven model the decline in water availability and land values from head to tail is accentuated along channels having greater lobbying power at the head and attenuated along channels having greater lobbying power at the tail our paper shows how power disparities can be leveraged through the administrative state to capture valuable common resources

on the effects of schooling vintage on experience earnings profiles theory and evidence abstract in this paper a distinction is made between human capital depreciation related to a worker s aging and depreciation due to the obsolescence of the worker s education schooling specific obsolescence of human capital is incorporated in the mincerian model of earnings and it is shown how this obsolescence affects the worker s earnings profile using the israeli 1983 census we show that for high tech oriented industries for which obsolescence is relatively important obsolescence effects are more significant than for low tech oriented industries and consequently the experience earnings peak falls faster with increasing education in the former

food security gender and occupational choice among urban low income households this paper examines an adaptive strategy using occupational choice that can be undertaken by household members in urban poor areas to help ensure their access to food our investigation focuses on self employed women and men in 14 predominantly slum communities in bolivia ecuador philippines and thailand results of our empirical analysis show that choice of business is associated with household vulnerability to food insecurity with women in vulnerable households likely to engage in food enterprises the findings suggest that urban low income households can mitigate the risk of food shortage through the selection of an enterprise activity that earns money income and is a direct source of food for consumption

poverty food security nexus evidence from a survey of urban slum dwellers in kolkata we explore the poverty food security nexus using an experience based indicator of food security constructed using a cross section sample of slum households in kolkata within the framework of a simultaneous ordered probit model we find a poor household is also likely to be food insecure additionally education gender and household composition are major drivers of food insecurity among low income urban households with the policy implication that anti poverty policies should be successful in eliminating household food insecurity however they need to be complemented with human capital investment and gender empowerment to be most effective

sex related wage differentials and women s interrupted labor careers the chicken or the egg wage differentials between men and women are often attributed to differences in on the job training the lower investment of women being explained by their plans to interrupt their careers for family reasons career interruptions however are often explained by low wages to trace this interrelationship i adopt a simultaneous equations approach trying to explain wages planned separations on the job training and the skill intensity of the job simultaneously skill intensity is found to be a key variable in the explanation of the wage differential traditional theory is hard pressed to explain the sex related differences in this variable

mean reversion of the current account evidence from the panel data unit root test abstract theoretically the modern intertemporal model of current account determination implies the stationarity of the current account however the empirical finding in the literature indicates nonstationary current account balances based on conventional unit root tests applying the panel data unit root test of im pesaran and shin we find support for the mean reverting property of the current account this in turn lends support to the intertemporal approach to the current account the policy implication of our findings is that current account deficits in major industrial countries are sustainable

on the enforcement of territorial use rights regulations a game theoretic approach territorial use rights commonly known as turfs in the literature consists in the allocation of fishing rights to individuals and or groups to fish in certain geographical locations a requisite for these communities to be granted fishing rights is the formulation of a management and exploitation plan mep while thus far the literature on turfs has been centred on the biological and technical aspects of it to our knowledge there is no work squarely dealing with the issue of enforcement of the mep that the community once granted the fishing use rights have to comply with we formally explore this issue from an economic perspective by formulating a static game of norm compliance in a regime of common property resource exploitation the key characteristic of this game is a monitoring and sanctioning mechanism where fishermen monitor and sanction one another we found that in the absence of any endogenous regulation from the part of the fishing community turfs can not avoid the economic overexploitation of the fishery we discuss the importance of economic incentives and disincentives in the formulation of endogenous regulations aimed at ensuring compliance of the mep our results on the

a theory of the critical mass i interdependence group heterogeneity and the production of collective action collective action usually depends on a critical mass that behaves differently from typical group members sometimes the critical mass provides some level of the good for others who do nothing wh

improving the performance of small scale irrigation systems the effects of technological investments and governance structure on irrigation performance in nepal abstract technological fixes and government management have often been assumed to be the most effective policy tools in improving the performance of small scale irrigation systems in asia many intervention efforts based upon that assumption however have brought about counterintuitive and counterintentional outcomes using irrigation management in nepal as the context this paper argues that technological investments might exacerbate the asymmetries of interests and endowments among irrigators which often dampens their incentives to contribute to infrastructure maintenance in addition irrigators in agency managed systems are usually given few incentives to engage in irrigation management their collective inaction often leads to low levels of performance

age seniority and labour costs lessons from the finnish it revolution the bad labour market performance of the workforce over 50 indicates that an aged workforce is often a burden for firms our paper seeks to investigate whether and why this is the case by providing evidence on the relation between age seniority and experience on the one hand and the main components of labour costs namely productivity and wages on the other for a sample of plants in three manufacturing industries forest industrial machinery and electronics in finland during the it revolution in the 1990s in average industries those not undergoing major technological shocks productivity and wages keep rising almost indefinitely with the accumulation of either seniority in the forest industry or experience in the industry producing industrial machinery in these industries the skill depreciation often associated with higher seniority beyond a certain threshold does not seemingly raise labour costs in electronics instead the seniority productivity profile shows a positive relation first and then becomes negative as one looks at plants with higher average seniority this body of evidence is consistent with the idea that fast technical change brings about accelerated skill depreciation of senior workers we cannot rule out however that our correlations are also simultaneously produced by worker movements across plants the seniority earnings profile in electronics is instead rather similar to that observed for the other industries a likely symptom of the prevailing finnish wage bargaining institutions which tend to make seniority one essential element of wage determination in the end seniority matters for labour costs not age as such but only in high tech industries not in the economy at large this is well tuned with previous research on gross flows of workers and jobs in the us and other oecd countries which unveiled the productivity driving role of resource reallocation or lack thereof between plants to improve the employability of the elderly at times of fast technical change public policy should thus divert resources away from preserving existing jobs and lend more attention to the retraining of old workers to ease their reallocation away from less productive plants or plants where they have become less productive into new jobs francesco daveri and mika maliranta

international intertemporal solvency in industrialized countries evidence and implications recent large current account deficits among industrialized countries have caused concern for policy makers some believe for example that the current buildup of claims on the u s by foreigners violates her solvency condition with respect to the rest of the world recent research 22 suggests that for a country s intertemporal solvency condition to hold the change in the country s obligations to the rest of the world i e her current account deficit must be stationary stationarity tests on current accounts were performed for the u s by trehan and walsh 22 and wickens and uctum 23 for the u s and canada by otto 15 and for twenty three countries by gundlach and sinn 10 these papers present evidence that current accounts are non stationary for several major industrialized countries including the u s the u k canada germany and japan these findings do not favor international intertemporal solvency for this reason the issue merits further investigation in this paper we test for the stationarity of current account deficits of the group of seven industrialized countries preliminary results confirm many of gundlach and sinn s 10 findings however several events during the 1980s might have caused discrete breaks in current account balances events potentially linked with current account breaks include the reduction in world inflation tax reduction and reform in the u s and other industrialized countries attempts at international macroeconomic coordination i e the plaza accord and shifts in the after tax rate of return on capital in many countries as shown in recent research on gross national product 16 2 if such breaks are not accounted for stationarity tests will be biased in favor of accepting the null hypothesis of non stationarity our results suggest strong evidence of discrete breaks in the u s and japan and some evidence favoring breaks in the u k germany and canada the break in the u s current account appears to occur in 1983 while breaks in the other countries appear to occur somewhat later between late 1984 and 1987 more importantly once these breaks are incorporated the evidence is more favorable toward the stationarity of current accounts in these countries these findings thus support intertemporal solvency for these countries

rules and games this paper reconsiders the relationship between the rules of a game and its outcomes we develop a notion of rule reform that leads to the selection of pareto improved equilibria points we then apply this notion to a series of naturally occurring fishing rules including examples from malaysia india brazil turkey and canada we show that reforming a game is conceptually akin to reforming an economy

overeducation undereducation and the theory of career mobility the theory of career mobility sicherman and galor journal of political economy 98 1 169 92 1990 claims that wage penalties for overeducated workers are compensated by better promotion prospects sicherman journal of labour economics 9 2 101 22 1991 was able to confirm this theory in an empirical study using panel data however the only retest using panel data so far robst eastern economic journal 21 539 50 1995 produced rather ambiguous results in the present paper random effects models to analyse relative wage growth are estimated using data from the german socio economic panel it is found that overeducated workers in germany have markedly lower relative wage growth rates than adequately educated workers the results cast serious doubt on whether the career mobility model is able to explain overeducation in germany the plausibility of the results is supported by the finding that overeducated workers have less access to formal and informal on the job training which is usually foun

evolution of cooperation in asymmetric commons dilemmas abstract field experiments with asymmetric commons dilemmas have shown that groups who are able to derive high social efficiency also had higher equity compared to groups who were not able to derive significant levels of social efficiency these findings resemble the high productivity in long lasting irrigation systems based on self governance we present an agent based model based on cultural group selection that shows that the patterns observed in the field experiments can be evolved in cases where agents participate regularly in less challenging symmetric public good dilemmas these results indicate that cooperation in asymmetric dilemmas can evolve and persist when the agents contend with other social dilemmas than the asymmetric dilemmas

power distribution the external environment and common property forest governance a local user groups model abstract this paper presents a recursive model that links power distribution imbalances with collective benefits and costs related to local common property forest governance using cross sectional analysis of 38 local common property forest user groups ejidos and comunidades in la sierra tarahumara mexico we test the impacts of power inequalities on different common property forest governance outcomes three measures of power inequality are used intra group power disparities links between the ejido authority and external political forces and asset disparities between the authority and the group average the proxies of power were found to be a key determinant of forest change and other collective action related variables the findings provide evidence in favour of the hypothesis that with greater power inequalities within the group agents with more power are able to impose higher costs on those with less power powerful leaders may provide positive externalities to the group in the form of norms however results indicate that greater power inequality tends to lead to more illegal logging and more forest degradation

the effect of the value of time on food consumption patterns in developing countries evidence from sri lanka this study shows that the opportunity cost of women s time can affect household food consumption patterns in developing countries demand equations for rice bread and the ratio of bread to total cereal consumption are estimated for urban sri lankan households the demand specification which is based on the new household economics includes as explanatory variables the woman s estimated market wage and the household s full income and alternatively observed income wages are estimated using the heckman procedure to correct for sample selection bias

using contingent valuation to explore willingness to pay for renewable energy a comparison of collective and voluntary payment vehicles abstract this study uses a split sample dichotomous choice contingent valuation survey of 1574 u s residents to explore willingness to pay wtp for renewable energy under collective and voluntary payment vehicles and under government and private provision of the good we also evaluate the impact of participation expectations on stated wtp we find some evidence that when confronted with a collective payment mechanism respondents state a somewhat higher wtp than when voluntary payment mechanisms are used similarly private provision of the good elicits a somewhat higher wtp than does government provision we also find that contingent valuation responses are strongly correlated with expectations for the wtp of others our results shed light on strategic response behavior and the incentive compatibility of different cv designs and offer practical insight into u s household preferences for how to support renewable energy

reexamining the added worker effect i introduction the added worker effect refers to a wife entering the labor force when her employed husband becomes unemployed this labor supply response is a transitory method of intertemporally smoothing family income and consumption and is of interest to labor economists and to macroeconomists concerned with the labor force participation of married women over the business cycle the added worker effect is familiar in terms of the income and substitution framework of the labor supply model when family earnings fall as a result of the husband s unemployment the income effect influences the wife to increase her labor supply similarly the wife s reservation wage for market work falls when the husband s increased nonemployment time provides a substitute for her home production and she is more likely to join the labor force as an added worker the wife s reservation wage is also influenced by the degree of complementarity or substitutability of leisure time between the husband and the wife observing the net result of these three factors the existence and the magnitude of the added worker effect is an empirical question this paper expands on the conventional income and substitution explanations in order to emphasize how employment uncertainty and liquidity constraints influence the added worker effect in the context of a dynamic model of family labor supply an unanticipated unemployment spell by the husband and the resulting shift in the budget constraint will alter expectations of future unemployment probabilities which will cause the wife to revise her life cycle profile of current and future labor supplies the explanation of liquidity constraints as a cause of the added worker effect is discussed in much of the literature see mincer 1962 1966 killingsworth and heckman 1986 and rosen 1992 as stressed by lundberg 1985 anticipated unemployment should not produce an added worker effect unless credit constraints limit access to borrowing against future income explaining how the timing of labor supply could be affected by variations in family income mincer 1962 cites capital market imperfections as a reason why a transitory increase in labor force participation of the wife may well be an alternative to dissaving asset decumulation or increasing debt while the added worker effect is easily explained by theoretical models of family labor supply such as those sketched above or that presented by ashenfelter 1980 empirical work has failed to reach a consensus regarding its magnitude or even whether it exists 1 although heckman and macurdy 1982 and lundberg 1985 have shown that the added worker effect is small yet significant pencavel 1982 does not find an added worker effect once he controls for individual specific fixed effects and maloney 1987 1991 does not find any evidence of an added worker effect it is interesting to note the wide variety of data used in this literature heckman and macurdy use annual panel data lundberg uses monthly panel data constructed from quarterly interviews pencavel uses annual panel data constructed from quarterly interviews and maloney uses annual cross sectional data this paper is motivated both by the conflicting empirical work regarding whether or not the added worker effect exists and by the view that the added worker effect should be analyzed using panel data with a short recall period cross sectional microdata cannot adequately capture the intertemporal decisions of wives joining the labor force when their husbands become unemployed annual measures of labor supply are less than ideal for examining the added worker effect since short spells of unemployment by the husband in the preceding year are often forgotten see horvath 1982 and akerlof and yellen 1985 my purpose is to document the magnitude of the added worker effect using monthly longitudinal microdata from the current population survey cps

water externalities tragedy of the common canal laboratory experiments are used to investigate alternative solutions to the allocation problem of a common pool resource with unidirectional flow focus is on the comparative economic efficiency of nonbinding communications bilateral coasian bargaining allocation by auction and allocation by exogenous usage fee all solutions improve allocative efficiency but communication and bilateral bargaining are not generally as effective as market allocations an exogenously imposed optimal fee results in the greatest allocative efficiency closely followed by an auction allocation that determines the usage fee endogenously

a review of progress in empowerment of women in rural water management decision making processes abstract the authors of this paper explore the links between water infrastructure water policies processes and protections along with mechanisms for women s leadership and decision making for contributing to rural well being the broad brush strokes approach is our attempt to reveal the breadth and complexity of the interdisciplinary nature of problems which canonly be solved via interdisciplinary and collaborative approaches poor rural women are disproportionally and adversely impacted by domestic and public gendered roles in relation to water accessibility system design and management as well as by the high costs of water distribution the inadequacy of fair water distribution channels is compounded by the growing influence of water privatization advocates the significant changes in climate and global warming also threaten accessibility to safe water and add levels of competitiveness and vulnerability for people in many regions of the world the recommendations proposed in this paper underscore the need for proper management of water resources to prevent and to reduce water conflicts and to increase all dimensions of well being this paper builds upon literature from four interconnected strategies 1 investing in water infrastructure to increase well being 2 establishing policies and legislation to protect the global commons human rights and enhance economic well being 3 embedding gender equality and women s leadership in water management and 4 developing strategic interventions to reduce and mitigate adverse global affects by educating for sustainable development preventing and planning around climate change and enhancing local water management through resisting global privatization approaches

common pool resource appropriation under costly cooperation abstract in addition to the usual fixed costs we introduce variable costs in a community s effort to cooperate in extracting from a common pool resource using a standard supervision mechanism these variable costs are shown to be an increasing function of individual members incentives to default the model explains why we frequently observe communities that all cooperate and have relatively similar resource endowments and yet achieve very different levels of extraction

the sustainability of current account deficits abstract this paper proposes a new method of determining whether a country is likely to be able to sustain its current account deficits without defaulting on its debt it is based on the notion of the national intertemporal budget constraint ibc which is derived from a forward solution of the balance payments identity although the problem is formally similar to that considered in the literature on the government ibc a more general solution is obtained by allowing the primary deficit to be endogenous instead of exogenous it is shown that the existence of negative feedback from net indebtedness to the primary deficit a wealth effect is sufficient this method supplants the ad hoc approach previously adopted in the current account literature whilst many of the same variables appear a formal structure for analysing them is provided

coping with asymmetries in the commons self governing irrigation systems can work many analysts presume that the appropriators of a common pool resource are trapped in a hobbesian state of nature and cannot themselves create rules to counteract the perverse incentives they face in managing the resource the logical consequence of this view is to recommend that an external authority the government take over the commons but considerable empirical evidence from field and experimental settings holds that appropriators frequently do constitute and enforce their own rules and that these rules work our research agenda is to develop a coherent understanding of the set of conditions that enhance or detract from self organizing capabilities when individuals differ substantially from one another for the sake of concreteness this paper focuses on the asymmetry present in most irrigation systems between those who are physically near the source of water the head enders and those who are physically distant from it the tail enders this paper first explores the interaction between head end and tail end farmers particularly their decisions about whether to devote resources to the upkeep of the irrigation system and how bargaining between the parties can benefit all sides finally we examine empirical evidence from a study of irrigation institutions in nepal and discuss the broader practical significance of our findings

food value chain transformations in developing countries selected hypotheses on nutritional implications we examine how the transformation of food value chains fvcs influence the triple malnutrition burden undernourishment micronutrient deficiencies and over nutrition in developing countries we propose a fvc typology modern traditional modern to traditional and traditional to modern that takes into account the participants the target market and the products offered next we propose selected hypotheses on the relationship between each fvc category and elements of the triple malnutrition burden the primary finding is that the transformation of fvcs creates challenges and opportunities for nutrition in developing countries for example modern fvcs may increase over nutrition problems and alleviate micronutrient deficiencies for urban people with relatively high incomes however they have little nutritional impacts among rural residents and urban poor people who primarily depend on traditional fvcs to access adequate quantities of calories and micronutrients in addition modern food manufacturers are leveraging traditional distribution networks modern to traditional fvcs substantially increasing access to low priced processed packaged foods in rural areas and low income urban neighbors with mixed impacts on the triple burden of malnutrition further research should focus on the influence of fvc transformation on reduction of micronutrient deficiencies on modeling demand substitution effects across food categories and the attendant policy implications for malnutrition

learning to cooperate stochastic and tacit collusion in social exchange the prisoner s dilemma formalizes the social trap that arises when individually rational choices aggregate with mutually undesirable consequences the game theoretic solution centers on the opportunity for tacit collusion in repeated play however not all actors grasp the strategic implications of future interaction accordingly this study reformulates the game as a stochastic learning model in which the behavior of interdependent actors is constinually shaped by sanctions and cues generated by their interaction computer simulations of a two person game show that adaptive actors are led into a social trap more readily than are fully rational actors but they are also better at finding their way out prosocial norms appear to be a consequence rather than cause of cooperation but useful in promoting forgiveness of random deviance the model is then elaborated as an n way prisoner s dilemma simulations show how the effects of network size density mobility and anonymity derive from a fundamental princi

targeting the poor in mexico an evaluation of the selection of households into progresa abstract in this paper we conduct an evaluation of the targeting method used by health education and nutrition program progresa of mexico to identify beneficiary households we address two key questions a how well does progresa s targeting perform and b how does the program perform in terms of its impact on poverty alleviation relative to other feasible methods and transfer schemes the first question is accomplished by comparing progresa s method to an alternative selection method based on household consumption which is our preferred measure of welfare we employ the concepts of undercoverage and leakage and find that progresa selection method is more effective in identifying the extremely poor localities or households but less so when it comes to distinguishing among localities or households in the middle of the scale to address the second question we compare the potential impact of progresa on poverty alleviation against uniform transfers that involve no targeting at all targeting based on consumption and geographic targeting i e targeting at the locality level rather than at the household level we find that progresa s method of targeting households outperforms uniform coverage and targeting at the locality level in terms of reducing the poverty gap and severity of poverty indices even after taking into account the economic costs of targeting but the closeness of progresa s performance to what could be achieved by geographic targeting alone raises some serious questions about the costs and benefits associated with the practice of household targeting within poor localities

unit root tests of the current account balance implications for international capital mobility the extent of international capital mobility is assessed in a time series context the possibility that the current account balance of different 0ecd countries contains a unit root is explored it is shown that if the ratio of the current account balance to gdp is found to be integrated of the order of one the country is likely to be part of the world capital market the results for the whole period 1950 1988 indicate that the current account balance of at least germany japan and the united states contains a unit root considering the subperiods before and after 1972 it is shown that international capital mobility increased after the breakdown of the bretton woods system

retraining for the unemployed and the quality of the job match in germany retraining is an important measure in active labour market policy providing unemployed individuals with extensive vocational training using administrative data we show that retrainin

locational asymmetry and the potential for cooperation on a canal abstract illegal water diversions and lax rule enforcement are common on irrigation canals we present a mathematical programming model of a watercourse calibrated to a canal in maharashtra on which farmers voted to cooperate to control water theft the model solution computes the crop choices and profits of individually optimizing farmers who differ in their location it reveals the spatial distribution of gains and losses from cooperation it illuminates why voluntary bargaining will rarely achieve an efficient water allocation it also shows that landless laborers might well be against local cooperation if the expropriated water nurtures labor intensive crops

impacts of devaluation on senegalese households policy implications abstract in january 1994 the franc cfa was devaluated from 50 to 100 fcfa to the french franc this article uses detailed income and expenditure data to simulate the impact of the devaluation on real household income and identify the groups in senegal that are most damaged urban households are hit hardest because they consume large quantities of imported rice and do not earn income from exportables surprisingly one rural area is as negatively affected as the urban areas one experiences no change and a third realizes only a small 5 increase in real income these small or negative affects occur because consumption of imported rice is high which is still the case a year after devaluation and income from the production of exportable peanuts is low relatively strong positive impacts 14 16 increase in real income were realized only in the two zones where peanuts account for a large share of total income about 50 this is perhaps a more negative or in some cases ambiguous impact in rural areas than we think policymakers expected the difference from expectations is due to the higher than expected levels of rice consumption and the lower than expected shares of income earned from peanut production these two facts together lead to a greater negative demand side effect and smaller positive supply side effects of devaluation in several rural zones attention should be given to 1 policies to protect vulnerable groups and 2 policies to stimulate investment by groups realizing short run increases in income thereby channeling the short run benefits into actions that will foster long run economic growth

irrigation as a historical determinant of social capital in india a large scale survey analysis summary it is widely understood that the same policy interventions can have different outcomes depending on the social structures they are implemented in much less clear though is what fundamentally determines communities social capital or the way individuals in a society interact this study analyzes how irrigation practices a key feature of agricultural organization in india affect different indicators of social capital to this end an informative household survey is combined with detailed historical agricultural statistics on irrigation and grain cultivation the depth of the datasets allows for fine grained analysis of effects of different kinds of irrigation on groups with varying degrees of involvement in the agricultural production process i show a significant negative influence of specific types of irrigation on the prevalence of conflict and an increased likelihood for attendance of public meetings yet it is not possible to establish a broad and consistent relationship between agricultural indicators and social capital which contradicts previous research furthermore specific groups with varying incentive structures based on their land holding status and agricultural engagement appear to be affected by different kinds of irrigation the results underline the need for a multidimensional analysis of both social capital and agricultural organization as well as their interaction i do not find evidence supporting the rice theory of culture

collective action and network structure i develop and analyze a mathematical model describing the relationship between individual contributions to a collective good and the network of social relations that makes these contributions interdependent starting from the assumption that actors respond to the contributions of others because of efficacy concerns and norms offairness i derive predictions about the impact of network structure on total contributions network density and size influence collective action outcomes in dramatically different ways depending on the structural position of those who make unconditional contributions moreover these effects are highly nonlinear suggesting that the impact of social ties on collective action may be quite sensitive to mobilization contexts

kinship networks and entrepreneurs in china s transitional economy1 this research draws insights from two theoretical traditions one is new institutionalism which emphasizes the role of institutions both formal and informal in economic growth the other is social network analysis which highlights the role of interpersonal relations in producing and enforcing informal norms integrating these two approaches yields the thesis that social networks affect economic growth via enforcing informal institutions the article focuses on the economic payoff of kinship networks in the context of china s rural industrialization to argue that kin solidarity and kin trust played an important role in protecting the property rights of private entrepreneurs and reducing transaction costs during the early stages of market reform when formal property rights laws were ineffective and market institutions underdeveloped data from 366 villages show that the strength of kinship networks has large positive effects on the count and workforce size of private rural enterprises and insignificant

are current account deficits sustainable evidence from panel cointegration abstract conventional cointegration tests fail to consider information across countries which leads to efficiency loss in estimation in this article we apply panel cointegration tests to examine the cointegration between exports and imports among the g7 our findings support the sustainability of current accounts among major industrial countries which lends support to the intertemporal approach to the current account

cointegration of long span saving and investment abstract we find that saving and investment cointegrate in all or most countries in maddison s research memorandum no 443 1991 long span data set by a variety of time series and panel data tests we interpret our results as reflecting current account solvency and not capital immobility

the paradox of group size in collective action a theory of the critical mass ii many sociologists incorrectly believe that larger groups are less likely to support collective action than smaller ones the effect of group size infact depends on costs if the costs of collective goods rise with the number who share in them larger groups act less frequently than smaller ones if the costs vary little with group size larger groups should exhibit more collective action than smaller ones because larger groups have more resources and are more likely to have a critical mass of highly interested and resourceful actors the positive effects of group size increase with group heterogeneity and nonrandom social ties paradoxically when groups are hetero geneous fewer contributors may be needed to provide a good to larger groups making collective action less complex and less expensive

kantian optimization a microfoundation for cooperation abstract although evidence accrues in biology anthropology and experimental economics that homo sapiens is a cooperative species the reigning assumption in economic theory is that individuals optimize in an autarkic manner as in nash and walrasian equilibrium i here postulate a cooperative kind of optimizing behavior called kantian it is shown that in simple economic models when there are negative externalities such as congestion effects from use of a commonly owned resource or positive externalities such as a social ethos reflected in individuals preferences kantian equilibria dominate the nash walras equilibria in terms of efficiency while economists schooled in nash equilibrium may view the kantian behavior as utopian there is some perhaps much evidence that it exists if cultures evolve through group selection the hypothesis that kantian behavior is more prevalent than we may think is supported by the efficiency results here demonstrated

avoiding complexity catastrophe in coevolutionary pockets strategies for rugged landscapes can firms and coevolutionary groups suffer from too much interdependent complexity is complexity theory an alternative explanation to competitive selection for the emergent order apparent in coevolutionary industry groups the biologist stewart kauffman suggests a theory of complexity catastrophe offering universal principles explaining phenomena normally attributed to darwinian natural selection theory kauffman s complexity theory seems to apply equally well to firms in coevolutionary pockets based on complexity theory four kinds of complexity are identified kauffman s nk c model is positioned at the edge of chaos between complexity driven by newtonian simple rules and rule driven deterministic chaos kauffman s insight which is the basis of the findings in this paper is that complexity is both a consequence and a cause multicoevolutionary complexity in firms is defined by moving natural selection processes inside firms and down to a parts level of analysis in this instance porter s value chain level to focus on microstate activities by agents the assumptions of stochastically idiosyncratic microstates and coevolution in firms are analyzed competitive advantage as a dependent variable is defined in terms of nash equilibrium fitness levels this allows a translation of kauffman s theory to firms paying particular attention to 1 how value chain landscapes might be modeled 2 assumptions underlying kauffman s models making them amenable to firms and 3 a delineation of seven of kauffman s computational experiments as part of the translation possible parallels between the application of complexity catastrophe theory to coevolutionary pockets and studies by institutional theorists and social network analysts are discussed the models derive from spin glass microstate models resulting in boolean games kauffman s boolean statistical mechanics is introduced in developing the logic underlying the somewhat simplified nkm c model the model allows the use of computational experiments to better understand how the dependent variable value chain fitness is affected by changes in the number of internal interdependencies k the number of coevolutionary links with opponents c the size of the coevolutionary pocket s and the number of simultaneous adaptive changes among other things various computational experiments are presented that suggest strategic organizing approaches most likely to foster competitive advantage high or low nash equilibrium fitness levels are shown to result from internal and external coevolutionary densities as a function of links among value chain competencies within a firm and between a firm and an opponent complexity phenomena appear to suggest a number of expected and thus validating and surprising strategies with respect to complex organizational interdependencies for example moderate complexity fares best and external coevolutionary complexity sets an upper bound to advantages likely to be gained from internal complexity various complexity lessons are discussed models such as the nk c could offer insights into strategic organizing

water communities in the republic of macedonia an empirical analysis of membership satisfaction and payment behavior summary utilizing primary survey data we investigate the performance of water communities wcs a form of self managing organization for irrigation in the bregalnica region of the republic of macedonia while their introduction improved cost recovery only modest changes occurred in the cost of irrigation water and many farmers remain indifferent to the wcs econometric analysis focuses on the decision of farmers to join a wc determinants of farmers satisfaction with wcs and factors associated with changes in payment behavior key determinants identified include transparency and trust regarding the conduct of wcs cost recovery rates farm size and irrigation costs membership satisfaction is an important determinant of payment behavior

social networks and collective action a theory of the critical mass iii most analyses of collective action agree that overcoming the freerider problem requires organizing potential contributors thus making their decisions interdependent the potential for organizing depends on the social ties in the group particularly on the overall density or frequency of ties on the extent to which they are centralized in a few individuals and on the costs of communicating and coordinating actions through these ties mathematical analysis and computer simulations extend a formal microsocial theory of interdependent collective action to treat social networks and organization costs as expected the overall density of social ties in a group improves its prospects for collective action more significant because less expected are the findings that show that the centralization of network ties always has a positive effect on collective action and that the negative effect of costs on collective action declines as the group s resource or interest heterogeneity increases these nonobvious resu

the rate of return to investments in on the job training in this paper we use the overtaking method to calculate marginal rates of return to on the job training as we have no prior information on who invests in ojt and who does not we use a switching regression model with unknown regimes to obtain parameter estimates of the wage profiles the estimation results show that lower intercepts are associated with steeper wage profiles this confirms the prediction that those who invest in ojt have lower initial wages but higher wage growth we further find that the marginal rate of return to ojt is high and increases with education

some urban facts of life implications for research and policy abstract this review of recent literature explores the challenges to urban food and nutrition security in the rapidly urbanizing developing world the premise of the manuscript is that the causes of malnutrition and food insecurity in urban and rural areas are different due primarily to a number of phenomena that are unique to or exacerbated by urban living these areas include a a greater dependence on cash income b weaker informal safety nets c greater labor force participation of women and its consequences for child care d lifestyle changes particularly diet and exercise patterns e greater availability of public services but questionable access by the poor f greater exposure to environmental contamination and g governance by a new possibly nonexistent set of property rights the main focus is on identifying what is different about urban areas so as to better frame the program and policy responses

overeducation in the labour market abstract this paper presents a review of the literature on overeducation the paper assesses the consistency of overeducation within the context of a number of theoretical frameworks including human capital theory hct and assignment theory the analysis goes on to discuss the various measurement controversies associated with the study of overeducation in order to provide an assessment of the extent to which the impacts of the phenomenon represent an economic reality as opposed to a statistical artefact after reviewing the literature it is concluded that the impacts of overeducation are likely to be non trivial and that the phenomenon may potentially be costly to individuals and firms as well as the economy more generally the existence of overeducation also raises some doubts with respect to the validity of some of the central assumptions and predictions of hct that are unlikely to be fully explained by gaps in the standard wage equation framework

maize milling market reform and urban food security the case of zimbabwe abstract government policy in much of eastern and southern africa has encouraged the development of highly centralized large scale milling facilities which has in turn promoted the consumption of highly refined and expensive maize meal compared to that produced by small scale hammer mills policies to develop competitive small scale milling facilities in urban areas are apparently neglected because of the conventional perception in eastern and southern africa that urban consumers strongly prefer the refined industrially milled meals and are not responsive to price differences between various types of maize meals results of consumer and miller surveys in zimbabwe call into question the validity of these perceptions simulation analysis also indicates that the elimination of policy constraints that block small scale millers access to grain would reduce overall marketing costs thereby allowing higher producer prices lower consumer prices and or lower government subsidies the case of zimbabwe suggests that market reform may considerably reduce the magnitude of the tradeoff between governments food security and budget minimization objectives

why do low educated workers invest less in further training several studies document that low educated workers participate less often in further training than high educated workers this article investigates two possible explanations low educated workers invest less in training because of 1 the lower economic returns to these investments or 2 their lower willingness to participate in training controlling for unobserved heterogeneity we find that the economic returns to training for low educated workers are positive and not significantly different from those for high educated workers however low educated workers are significantly less willing to participate in training we show that this lesser willingness to train is driven by economic preferences and personality traits

urban food subsidies in the context of adjustment the case of zambia abstract one of the most complex policy issues facing many developing country governments over the next decade particularly in sub saharan africa concerns the problem of providing the impoverished sections of urban populations with adequate food at prices they can afford while both meeting the fiscal requirements of adjustment programmes and promoting domestic agricultural production the pressure to reduce urban food subsidies is in many cases already immense and the implications for urban household food security are considerable this article looks at recent zambian experience and suggests that new and more efficient ways of targeting subsidies may be required if levels of food consumption are not to deteriorate still further

equity reexamined a study of community based rainwater harvesting in rajasthan india summary equity is central to community based development efforts but community perspectives on equity are seldom examined in the development literature this study investigates how equity in a rainwater harvesting program is understood and practiced in two rajasthani communities drawing on bourdieu s concept of symbolic capital we find that the symbolic capital accrued from contributing to the project is as central to community understandings of equity as the distribution of benefits from the project we find that a continuing sense of community despite heterogeneity is itself a form of symbolic capital community based valuations of equity thus enable a more catholic approach to costs and benefits that broadens our knowledge both of equity and of development

current account deficits in africa stylized facts and basic determinants abstract this article analyzes the behavior of current account deficits in africa the findings are that deficits are i not very persistent ii positively linked with domestic growth iii strongly linked with public and private savings suggesting that fiscal consolidation in imf supported programs may be relatively effective iv linked with aid flows so as to close the external gap and v linked with currency depreciation and the terms of trade

the effectiveness of public sponsored training revisited the importance of data and methodological choices this article revisits the effectiveness of public sponsored training programs for germany accounting for dynamic selection into heterogeneous programs we carefully assess to what extent various aspects of our empirical strategy such as conditioning flexibly on employment and benefit histories the availability of rich data handling of later program participations and further methodological choices affect our estimates our results imply pronounced negative lock in effects in the short run and positive medium run effects on employment and earnings when job seekers enroll after having been unemployed for some time we find that data and specification issues can have a large effect

active labor market policy evaluations a meta analysis this article presents a meta analysis of recent microeconometric evaluations of active labour market policies we categorise 199 programme impacts from 97 studies conducted between 1995 and 2007 job search assistance programmes yield relatively favourable programme impacts whereas public sector employment programmes are less effective training programmes are associated with positive medium term impacts although in the short term they often appear ineffective we also find that the outcome variable used to measure programme impact matters but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate

women food security and development in less industrialized societies contributions and challenges for the new century summary in this paper i examine the links between women food security and development from a crossnational perspective i find that the proximity to gender equality constructed from the united nations human development and gender related development indices improves development in the form of both child hunger and child mortality extending these results other forms of female empowerment including female contraceptive prevalence significantly improve development outcomes in less industrialized societies findings are net of theoretical controls for economic development population pressure globalization democratization and region further strengthening the importance of gender considerations countries that incorporate gender into policy and program considerations benefit from such inclusion in the form of social and economic development outcomes findings are an important crossnational extension of existing research utilizing new measures that capture the important development dynamic

testing for the cointegrating rank of a var process with structural shifts tests for the cointegrating rank of a vector autoregressive process are considered that allow for possible exogenous shifts in the mean of the data generation process the break points are assumed to be known a priori it is proposed to estimate and remove the deterministic terms such as mean linear trend term and a shift in a first step then systems cointegration tests are applied to the adjusted series the resulting tests are shown to have known limiting null distributions that are free of nuisance parameters and do not depend on the break point the tests are applied for analyzing the number of cointegrating relations in two german money demand systems

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

economic appraisal of profitability and sustainability of peri urban agriculture in bangkok abstract promoters of urban and peri urban agriculture generally stress its positive role in terms of food security income employment and improvement of the urban environment unfortunately competition with agricultural and non agricultural uses of peri urban farm land often translates into intensive farming systems that are detrimental to the environment based on two original surveys of peri urban farms in the area of bangkok this paper ranks four cropping systems fish shrimp rice and fruits according to their economic profitability a second step of the analysis aims at taking into account the cost of water into the analysis so as to assess whether the hierarchy formerly established is modified although all environmental costs are not introduced and environmental benefits are ignored this work paves the way for further research in the area of taking into account the environmental impact of farming activities

when does one bad apple spoil the barrel an evolutionary analysis of collective action this paper studies collective action games in which the production of a public good requires teamwork a leading example is a threshold game in which provision requires the voluntary participation of m out of n players quantal response strategy revisions allow play to move between equilibria in which a team successfully provides and an equilibrium in which the collective action fails a full characterization of long run play reveals the determinants of success these include the correlation between players costs of provision and their valuations for the good the addition of an extra bad apple player can spoil the barrel by destabilizing successful teams and so offers a rationale for limiting the pool of possible contributors copyright 2008 wiley blackwell

the economics of new blood abstract we construct a dynamic general equilibrium model of search and matching where public knowledge grows through time and workers accumulate a fraction of this knowledge through education retraining due to search delays the unemployment pool is populated by vintages of workers of differing productivities through intergenerational rivalry the human capital of older generations is rendered obsolete relative to that of the new blood higher knowledge growth exacerbates intergenerational competition thereby lowering education and growth while raising unemployment and inequality these findings help explain wage compression expansion and the hump shaped wage tenure profile across cohorts

the emerging u s current account deficit in the 1980s a cointegration analysis this paper seeks to understand the recent history of u s external imbalances by identifying the long run tendency of the u s current account balance and investigating its behavior the procedure that is adopted is to estimate cointegrating regressions between u s exports and imports of goods and services estimates from cointegrating regressions between several measures of u s exports and imports show that up to about the end of 1983 the u s current account tended toward zero since that time there has been an apparent structural shift resulting in a long run tendency for a deficit in excess of 100 billion per year copyright 1992 by mit press

testing a present value model of the current account evidence from us and canadian time series abstract this paper presents a simple model of current account determination based upon the permanent income hypothesis of private consumption behavior under rational expectations the model employs a representative national agent who is forward looking and can borrow and lend at a constant world interest rate a present value relationship for the current account is derived and its implications are tested on post war data for the united states and canada testing is done using the framework developed by campbell and shiller 1987 which allows the forcing variables in the model to be difference rather than trend stationary our empirical results indicate the most stringent restrictions of the present value model are strongly rejected by the us and canadian data however less formal procedures suggest the consumption smoothing model has some ability to track the dynamic behavior of the us current account jel f32

environmental variability and collective action experimental insights from an irrigation game abstract studies of collective action in commons dilemmas in social ecological systems typically focus on scenarios in which actors all share symmetric or similar positions in relation to the common pool resource many common social ecological systems do not meet these criteria most notably irrigation systems participants in irrigation systems must solve two related collective action problems 1 the provisioning of physical infrastructure necessary to utilize the resource water and 2 the asymmetric common pool resource dilemma where the relative positions of head enders and tail enders generate asymmetric access to the resource itself water in times of scarcity head enders have an incentive to not share water with tail enders likewise tail enders have an incentive to not provide labor to maintain the system if they do not receive water these interdependent incentives may induce a cooperative outcome under favorable conditions however how robust is this system of interdependent incentives in the presence of environmental variability that generates uncertainty about water availability either through variation in the water supply itself or through shocks to infrastructure this paper reports on results from laboratory experiments designed to address this question

majoritarian management of the commons yong j yoon this article analyzes usage of a common property resource the commons under collectivization as compared with more familiar privatization institutional arrangements particular emphasis is on majority decision rules when separate majority coalitions may authorize simultaneous usage of a common resource total value is dissipated but the interdependencies introduced by possible membership in differing coalitions to an extent reduce the incentives for exploitation the formal analysis is analogous to that familiar in cournot nash duopoly oligopoly models but with differing efficiency implications the argument has relevance for differential benefit public spending from general tax sources as well as other applications jel d7 h00 02 i introduction the operation and management of common property resources the commons have been exhaustively examined in economics and political science both in formal analyses and in practical application 1 however the full range of institutional alternatives has not been covered even at a level of stylized interaction models our purpose in this article is to fill in at least some of the gaps here and specifically to examine the predicted results that emerge when usage decisions are collectivized under majoritarian voting rules to our knowledge this analysis has not been undertaken we shall in section ii first summarize the classic analysis along with the familiar institutional reform suggested as a solution to the tragedy this solution privatization is analyzed under several institutional variants in section iii we then shift attention in section iv to arrangements under which usage of the commonly shared resource or facility is chosen by some predesignated collective decision rule specifically we concentrate analysis on the predicted results in several majority rule environments we analyze thoroughly the case in which different majority coalitions make usage decisions separately and simultaneously the analysis incorporates recognition on the part of any member of a specific majority of the prospect for membership in alternative majority coalitions we demonstrate that instead of full dissipation the level of usage that emerges in the limit is structurally analogous to the outcome in the cournot nash duopoly model even if the efficiency implications differ in the two settings ii the classic model summarized the familiar tragedy of the commons lends itself to stylized illustration an immobile but renewable resource exists a common pasture aquifer fishing ground and has economic value if used effectively through the application of units of complementary mobile resources that are themselves valued in their alternative market opportunities there are no assigned ownership rights to the immobile resource or facility free and open access may dissipate most or even all of the potential value consider figure 1 the productivity of mobile complementary resource units as applied elsewhere in the economy e g steers grazed on the open range beyond the commons is set at w a value assumed constant the quantity of such inputs applied on the commonly used facility is measured along the abscissa in figure 1 the marginal and average productivity curves for the units of applied complementary resource are shown as mp and ap total value is maximized when q sub m units are applied at which point marginal product values are equalized as between this usage and other opportunities the maximal value of the commonly used resource is the area under the mp curve above w if entry to usage is open and if the institutional structure is such as to allow for decentralized decisions on the part of many potential users rational choices made separately will generate a full behavioral equilibrium at q sup where average product per unit of the complementary resource is equalized as between the commons and other uses

the sustainability of india s current account this study conducts an investigation into the sustainability of the indian current account using data for 1950 onwards a necessary condition for current account sustainability is that exports and imports are cointegrated after testing for unit roots that allow for a structural break we employ parametric tests for cointegration based on johansen 1995 and saikkonen and lutkepohl 2000a b c as well as the nonparametric procedure proposed by breitung 2002 and breitung and taylor 2003 that does not assume linearity by employing these procedures recursively two distinct regimes are identified characterized by whether or not imports and exports are cointegrated the regime of noncointegration runs until the late 1990s and the second regime of cointegration is present after that this latter regime coincides with the liberalization of the indian economy