do conditional cash transfers for schooling generate lasting benefits a five year followup of progresa oportunidades conditional cash transfer cct programs link public transfers to human capital investment in hopes of alleviating current poverty and reducing its intergenerational transmission however little is known about their long term impacts this paper evaluates longer run impacts on schooling and work of the best known cct program mexico s progresa oportunidades using experimental and nonexperimental estimators based on groups with different program exposure the results show positive impacts on schooling reductions in work for younger youth consistent with postponing labor force entry increases in work for older girls and shifts from agricultural to nonagricultural employment the evidence suggests schooling effects are robust with time

pro poor targeting and accountability of local governments in west bengal a commonly alleged pitfall of decentralization is that poverty socio economic inequality and lack of political competition allow local elites to capture local governments this hypothesis is empirically examined using a longitudinal sample of 89 west bengal villages concerning targeting of credit agricultural input kits employment programs and fiscal grants spanning the period 1978 98 higher poverty land inequality and low caste composition of the poor was associated with negligible adverse effects on targeting of private goods to the poor within villages but with lower employment generation out of allotted funds and significantly lower allocation of resources to the village as a whole political competition or literacy levels among the poor were not systematically related to targeting

public sector efficiency evidence for new eu member states and emerging markets in this article we analyse public sector efficiency in the new member states of the eu compared to that in emerging markets after a conceptual discussion of expenditure efficiency measurement we compute efficiency scores and rankings by applying a range of measurement techniques the study finds that expenditure efficiency across new eu member states is rather diverse especially as compared to the group of top performing emerging markets in asia econometric analysis shows that higher income civil service competence and education levels as well as the security of property rights seem to facilitate the prevention of inefficiencies in the public sector

the short term impact of unconditional cash transfers to the poor experimental evidence from kenya we use a randomized controlled trial to study the response of poor households in rural kenya to unconditional cash transfers from the ngo givedirectly the transfers differ from other programs in that they are explicitly unconditional large and concentrated in time we randomized at both the village and household levels furthermore within the treatment group we randomized recipient gender wife versus husband transfer timing lump sum transfer versus monthly installments and transfer magnitude us 404 ppp versus us 1 525 ppp we find a strong consumption response to transfers with an increase in household monthly consumption from 158 ppp to 193 ppp nine months after the transfer began transfer recipients experience large increases in psychological well being we find no overall effect on levels of the stress hormone cortisol although there are differences across some subgroups monthly transfers are more likely than lump sum transfers to improve food security whereas lump sum transfers are more likely to be spent on durables suggesting that households face savings and credit constraints together these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well being

does public insurance crowd out private insurance the cost of expanding public sector health programs depends critically on the extent to which public eligibility will cover just the uninsured or will crowd out existing private insurance coverage we estimate the extent of crowd out arising from the expansions of medicaid to pregnant women and children over the 1987 1992 period we estimate that approximately 50 percent of the increase in medicaid coverage was associated with a reduction in private insurance coverage this occurred largely because employees took up employer based insurance less frequently there is also some evidence that employers contributed less for insurance and that workers dropped coverage of dependents

what makes growth sustained abstract we identify structural breaks in economic growth in 140 countries and use these to define growth spells periods of high growth preceded by an upbreak and ending either with a downbreak or with the end of the sample growth spells tend to be shorter in african and latin american countries than elsewhere we find evidence that growth duration is positively related to the degree of equality of the income distribution democratic institutions export orientation with higher propensities to export manufactures greater openness to fdi and avoidance of exchange rate overvaluation favorable for duration and macroeconomic stability

reducing child malnutrition how far does income growth take us how rapidly will child malnutrition respond to income growth this article explores that question using household survey data from 12 countries as well as data on malnutrition rates in a cross section of countries since the 1970s both forms of analysis yield similar results increases in income at the household and national levels imply similar rates of reduction in malnutrition using these estimates and better than historical income growth rates the article finds that the millennium development goal of halving the prevalence of underweight children by 2015 is unlikely to be met through income growth alone what is needed to accelerate reductions in malnutrition is a balanced strategy of income growth and investment in more direct interventions

explaining differences in public sector efficiency evidence from russia s regions summary using the case of russia s regions this paper extends the literature on public sector efficiency in three directions an attempt to better understand differences in public sector efficiency through the study of subnational governments in one country the first examination of public sector efficiency of subnational governments in emerging markets and the first study of public sector efficiency in russia three types of scores of public sector performance and efficiency indicate substantial differences across regions an econometric examination suggests that they are largely explained by per capita income the share of federal transfers in subnational government revenue quality of governance and democratic control and the level of spending

the effect of welfare payments on work regression discontinuity evidence from ecuador abstract we study the impact of welfare payments in ecuador on the probability that adults work and on whether they are employed in the formal or informal sectors our identification strategy exploits the fact that welfare was limited to individuals below a cutoff value on a household poverty score we find no evidence that transfers discouraged work however among women welfare payments led to reductions in social security contributions which are mandated for salaried workers although the magnitude of these effects is small

public sector technical inefficiency in large u s cities abstract technical inefficiency is the extent to which production is below the maximum possible given the mix of chosen inputs controlling for the determinants of local property value that a local government cannot change a city produces local property value through the expenditure and revenue choices that it makes if a city is generating the highest attainable market value of aggregate property within its boundaries given the local fiscal choices that it has made then it is producing local government in a technically efficient manner in this paper using the concept of the stochastic frontier production function we measure technical inefficiency in the local public sector based upon a comparison of local property values the specification introduced allows the random component associated with the presence of technical inefficiency to depend on factors that have been suggested as limiting or enhancing technical inefficiency using a sample of 49 u s central cities we find that large city governments in the united states are operating at different degrees of technical inefficiency and the degree of technical inefficiency varies inversely with measured levels of competitive pressures

the importance of noncognitive skills lessons from the ged testing program it is common knowledge outside of academic journals that motivation tenacity trustworthiness and perseverance are important traits for success in life thomas edison wrote that genius is 1 percent inspiration and 99 percent perspiration most parents read the aesop fable of the tortoise and the hare to their young children at about the same time they read them the story of the little train that could numerous instances can be cited of high iq people who failed to achieve success in life because they lacked self discipline and low iq people who succeeded by virtue of persistence reliability and self discipline the value of trustworthiness has recently been demonstrated when market systems were extended to eastern european societies with traditions of corruption and deceit it is thus surprising that academic discussions of skill and skill formation almost exclusively focus on measures of cognitive ability and ignore noncognitive skills the early literature on human capital e g gary becker 1964 contrasted cognitive ability models of earnings with human capital models ignoring noncognitive traits entirely the signaling literature e g michael spence 1974 emphasized that education was a signal of a one dimensional ability usually interpreted as a cognitive skill most discussions of ability bias in the estimated return to education treat omitted ability as cognitive ability and attempt to proxy the missing ability by cognitive tests most assessments of school reforms stress the gain from reforms as measured by the ability of students to perform on a standardized achievement test widespread use of standardized achievement and ability tests for admissions and educational evaluation are premised on the belief that the skills that can be tested are essential for success in schooling a central premise of the educational testing movement since its inception much of the neglect of noncognitive skills in analyses of earnings schooling and other lifetime outcomes is due to the lack of any reliable measure of them many different personality and motivational traits are lumped into the category of noncognitive skills psychologists have developed batteries of tests to measure noncognitive skills e g robert sternberg 1985 these tests are used by companies to screen workers but are not yet used to ascertain college readiness or to evaluate the effectiveness of schools or reforms of schools the literature on cognitive tests ascertains that one dominant factor g summarizes cognitive tests and their effects on outcomes no single factor has yet emerged to date in the literature on noncognitive skills and it is unlikely that one will ever be found given the diversity of traits subsumed under the category of noncognitive skills studies by samuel bowles and herbert gintis 1976 rick edwards 1976 and roger klein et al 1991 demonstrate that job stability and dependability are traits most valued by employers as ascertained by supervisor ratings and questions of employers although they present no direct evidence on wages and educational t discussants susan mayer university of chicago cecilia rouse princeton university nan maxwell california state university hayward janet currie university of california los angeles

incentives to provide local public goods fiscal federalism russian style abstract based on a unique data set on russian city budgets this paper shows that revenue sharing between regional and local governments provides local governments with no incentive to increase tax base or provide public goods any change in local government s own revenues is almost entirely offset by changes in shared revenues this leads to governmental over regulation of private businesses it is shown that fiscal incentives are a determinant of the formation of private business and the efficiency of public goods provision the russian federalism is compared to the chinese federalism where fiscal incentives reputedly are stronger in many provinces

do husbands and wives pool their resources further evidence this paper replicates results of an article showing that families with children increased expenditures on women s clothing relative to men s after implementation of a policy that shifted a child subsidy payment from the father to the mother these results were interpreted as evidence that families do not pool their income but allocate consumption based on income source however the current paper also finds an increase in relative spending on women s clothing among childless couples a sample the policy change did not impact alternative explanations are explored for observing these patterns but none can rule out either bargaining or income pooling

public sector efficiency in transition and beyond evidence from czech local governments this article provides the first comparison of public sector efficiency in and beyond transition we compare the comprehensive efficiency scores of 202 local governments in the czech republic in the transition period of 1995 1998 and the post transition period of 2005 2008 and identify the period specific determinants of local government efficiency we observe convergence to the best practice frontier but also a growing efficiency gap between small and large governments in both periods municipal size and the main fiscal variables qualitatively affect efficiency in the same direction and in line with the fiscal stress hypothesis left wing ideology is only robustly associated with cost inefficiency in the transition period the geographic distances begin to matter for efficiency only in the post transition period

saving babies revisiting the effect of very low birth weight classification we reconsider the effect of very low birth weight classification on infant mortality we demonstrate that the estimates are highly sensitive to the exclusion of observations in the immediate vicinity of the 1 500 g threshold weakening the confidence in the results originally reported in almond doyle kowalski and williams 2010

money for nothing universal child care and maternal employment abstract the strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross country differences in maternal employment and of its rapid growth over the last decades we analyze a staged expansion of subsidized child care in norway our precise and robust difference in differences estimates reveal that there is little if any causal effect of subsidized child care on maternal employment despite a strong correlation instead of increasing mothers labor supply the new subsidized child care mostly crowds out informal child care arrangements suggesting a significant net cost of the child care subsidies

the effect of pre primary education on primary school performance although the theoretical case for universal pre primary education is strong the empirical foundation is weak in this paper we contribute to the empirical case by investigating the effect of a large expansion of universal pre primary education on subsequent primary school performance in argentina we estimate that one year of preprimary school increases average third grade test scores by 8 percent of a mean or by 23 percent of the standard deviation of the distribution of test scores we also find that preprimary school attendance positively affects student s self control in the third grade as measured by behaviors such as attention effort class participation and discipline

strategic state level environmental policy with asymmetric pollution spillovers this paper examines the strategic behavior of state level utility regulators in the context of the federal tradable emissions permits market when state to state pollution spillovers are asymmetric strategic behavior is possible because a state s environmental policy indirectly affects the price of permits and therefore abatement in other states we show that the optimal pollution penalty is comprised of two parts i a pigouvian tax adjusted for state to state spillovers and ii an optimal tariff designed to improve the terms of trade in permits generally abatement costs are not minimized and the outcome is pareto inefficient regardless of the size of the market 2001 elsevier science b v all rights reserved

do husbands and wives pool their resources evidence from the united kingdom child benefit common preference models of family behavior imply income pooling a restriction on family demand functions such that only the sum of husband s income and wife s income affects the allocation of goods and time testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed in this paper we present an alternative test based on a natural experiment a policy change in the united kingdom that transferred a substantial child allowance to wives in the late 1970s using family expenditure survey data we find strong evidence that a shift toward greater expenditures on women s clothing and children s clothing relative to men s clothing coincided with this income redistribution

correlated pollutants interregional redistribution and labor attachment in a federation we examine the efficiency of federal policies in a federation characterized by decentralized leadership imperfect labor mobility and transboundary pollution selfish regional governments regulate correlated pollutant emissions by choosing pollution tax and abatement levels in anticipation of the center s redistributive policy the center s objective function obeys a proportional equity principle which implies that its choice of interregional transfer satisfies the equalization of weighted regional welfare levels regional and central governments make their choices subject to migration incentives we show that the subgame perfect equilibrium for the sequential game played by regional and central governments yields socially optimal policies

the medium term effects of scholarships in a low income country despite progress in recent decades a substantial fraction of children in developing countries attain little schooling and many adults lack skills that are valued in the labor market we evaluate the medium term effects of a program that provided scholarships for three years to poor children upon graduation from elementary school in cambodia a low income country to do this we use a sharp regression discontinuity design we show that scholarships have substantial effects on school attainment by the time children would have been in grade 11 had they remained in school two years after they stopped being eligible for scholarships those who were offered scholarships have attained 0 6 more grades of completed schooling nevertheless we find no evidence that scholarships had significant effects on test scores employment earnings or the probability of getting married or having a child in adolescence

decentralized and efficient control of transboundary pollution in federal systems abstract decentralized control of transboundary pollution in federal systems can be efficient when population crowding is socially costly in this paper an upstream region abates pollution or makes an interregional income transfer to the downstream region with the sole intent of deterring immigration because either instrument abatement expenditure or interregional income transfer alone implements an efficient population distribution between the regions interregional income transfers are unnecessary for efficiency without explicit income transfers each region provides the efficient portion of the aggregate level of pollution abatement in the nash equilibrium

population mobility and transboundary environmental problems abstract a standard result in the literature on environmental economics is that efficient environmental policies regulating transboundary pollution will be adopted only if there is interjurisdictional coordination efficient policies can be adopted as a result of interregional treaties or mandated by a central authority the present paper demonstrates that if there is perfect population mobility between the regions affected by the transboundary pollution the efficient outcome is a nash equilibrium of the policy game between regional authorities this is true independently of what policies are available to the regional authorities however there may be more than one nash equilibrium so that policy coordination may be necessary in order to achieve the best equilibrium

measuring local government spending efficiency evidence for the lisbon region afonso a and fernandes s 2006 measuring local government spending efficiency evidence for the lisbon region regional studies 40 39 53 the expenditure efficiency of portuguese local governments in 2001 was assessed using data envelopment analysis for production frontier estimation a composite municipal output indicator was constructed and input and output efficiency scores were computed for 51 portuguese municipalities in the region of lisbon and vale do tejo this allows a determination of the extent of municipal spending that seems to be wasted relative to the theoretical best practice frontier the results suggest that vale do tejo municipalities could achieve on average the same level of output allegedly using around one third fewer resources improving performance without necessarily increasing municipal spending municipal expenditure technical efficiency data envelopment analysis dea lisbon afonso a and fernandes s 2006 l efficacite de la depense de l administration locale d

does more cash in conditional cash transfer programs always lead to larger impacts on school attendance abstract there is considerable evidence that conditional cash transfer cct programs can have large impacts on school enrollment including in very poor countries however little is known about what features of program design account for the observed outcomes in this paper we analyze the impact of a program in cambodia that made payments of varying magnitude to otherwise comparable households the identification is based on a sharp regression discontinuity design we find that a modest cash transfer equivalent to approximately 2 of the consumption of the median recipient household had a substantial impact on school attendance approximately 25 percentage points a somewhat larger transfer did not raise attendance rates above this level

policy reform and growth in post soviet russia in pursuit of its transition from a command to a market economy russia has witnessed enormous regional differences in economic growth rates moreover the implementation of economic reforms has also differed markedly across regions we analyze whether regional differences in reform policies can account for regional differences in growth rates and conclude that to a considerable degree they can most notably we find that regional differences in price liberalization policies exhibit a positive direct correspondence with growth we also find that regional differences in large scale privatization exhibit a positive correspondence with the regional formation of new legal enterprises which in turn exhibits a strong positive correspondence with growth

are there increasing returns to the intergenerational production of human capital information on ability and achievement test scores of sibling children many of whom had mothers who continued their schooling between births is used to test the hypothesis that maternal schooling augments the production of children s human capital that there are increasing returns to human capital estimates from models that take into account heterogeneity in maternal endowments could not reject this hypothesis and suggest benefits to postponed childbearing in particular they suggest that postponement of the initiation of childbearing by two years among women who are tenth graders would result in a 5 percent increase in their children s achievement test scores

the illusion of sustainability this brief summarizes the results of a gender impact evaluation study entitled the illusion of sustainability conducted during the time period 1998 to 2001 in kenya the study observed that deworming is a public good since much of its social benefit comes through reduced disease transmission people were less likely to take deworming if their direct first order or indirect second order social contacts were exposed to deworming the introduction of a small fee for deworming drugs led to an 80 percent reduction in treatment rates take up was not sensitive to the exact price level suggesting that it is particularly counter productive to charge small positive prices for the treatment of infectious diseases an intensive school health education had no impact on worm prevention funding for the study derived from world bank nih fogarty international center berkeley center for health research

pure public goods and income redistribution in a federation with decentralized leadership and imperfect labor mobility abstract we examine the non cooperative provision of a pure public good by regional governments in a federation similar to the european union where regional governments are stackelberg leaders and the central government is a stackelberg follower a federation with decentralized leadership the center makes interregional income transfers after it observes the contributions to the pure public good imperfectly mobile workers react to regional and central governments policies by establishing residence in their most preferred region despite the degree of labor mobility we show that the pure public good and interregional transfers are generally allocated efficiently in a federation with decentralized leadership

does money matter the effects of cash transfers on child development in rural ecuador abstract a large body of research indicates that child development is sensitive to early life environments so that poor children are at higher risk for poor cognitive and behavioral outcomes these developmental outcomes are important determinants of success in adulthood yet remarkably little is known about whether poverty alleviation programs improve children s developmental outcomes we examine how a government run cash transfer program for poor mothers in rural ecuador influenced the development of young children random assignment at the parish level is used to identify program effects our data include a set of measures of cognitive ability that are not typically included in experimental or quasi experimental studies of the impact of cash transfers on child well being as well as a set of physical health measures that may be related to developmental outcomes the cash transfer program had positive although modest effects on the physical cognitive and socioemotional development of the poorest c

giving children a better start preschool attendance and school age profiles this brief summarizes the giving children a better start preschool attendance and school age profiles in uruguay for the period 1995 the author study the effect of pre primary education on children s subsequent school outcomes by exploiting a unique feature of the uruguayan household survey ech that collects retrospective information on preschool attendance in the context of a rapid expansion in the supply of pre primary places using a within household estimator we find small gains from preschool attendance at early ages that get magnified as children grow up by age 15 treated children have accumulated 0 8 extra years of education and are 27 percentage points more likely to be in school compared to their untreated siblings instrumental variables estimates that attempt to control for non random selection of siblings into preschool lead to similar results pre primary education appears as a successful and cost effective policy to prevent early grade failure and its long lasting consequences in low income countries

trust in large organizations several authors suggest that trust is an important determinant of cooperation between strangers in a society and therefore of performance of social institutions we argue that trust should be particularly important for the performance of large organizations in a cross section of countries evidence on government performance participation in civic and professional societies importance of large firms and the performance of social institutions more generally supports this hypothesis moreover trust is lower in countries with dominant hierarchical religions which may have deterred networks of cooperation trust hold up remarkably well on a cross section of countries this abstract was borrowed from another version of this item

obstacles to takeup ecuador s conditional cash transfer program the bono de desarrollo humano summary social assistance programs cannot help the poor if the poor do not enroll in them obstacles to the takeup of social assistance in industrialized countries include information costs compliance costs and psychological costs using qualitative field research and quantitative analysis of data from a nationwide survey in 2013 14 we explore the impact of these costs on the takeup of the bono de desarrollo humano bdh a us 50 monthly cash transfer in ecuador drawing on interviews with ecuadorians whose households are eligible for the bdh as well as on findings about social assistance takeup in industrialized countries we hypothesize that particular information costs compliance costs and psychological costs along with program design and household poverty will influence the probability of bdh takeup we then use probit regression to estimate the statistical effect of these factors on the probability of takeup using data on 11 449 bdh eligible households sampled by ecuador s 2013 14 encuesta condiciones de vida living standards measurement survey controlling for program design and household poverty we find that compliance costs and psychological costs each have a significant deterrent effect on bdh takeup the purpose of social assistance is to help the poor but if social assistance is to achieve this goal the poor must actually receive it this study helps to identify the forces and circumstances that influence the takeup of an important social assistance program in a middle income latin american country

interregional spillovers in the presence of perfect and imperfect household mobility abstract when households are immobile across regions the decentralized provision of public goods that generate interregional benefit spillovers is inefficiently low we analyze this problem in an environment of interregional household migration and obtain the following results if households are perfectly mobile across regions then the decentralized provision of public goods generating spillovers is socially efficient there is no need for central government intervention if households are attached to particular regions for cultural or nationalistic reasons however at least one of two regions undersupplies the public good central government intervention can enhance efficiency

cash transfers and health evidence from tanzania how do conditional cash transfers impact health related outcomes this paper examines the 2010 randomized introduction of a program in tanzania and finds nuanced impacts an initial surge in clinic visits after 1 5 years due to more visits by those already complying with program health conditions and by non compliers disappeared after 2 5 years largely due to compliers reducing above minimal visits the study finds significant increases in take up of health insurance and the likelihood of seeking treatment when ill health improvements were concentrated among children ages 0 5 years rather than the elderly and took time to materialize the study finds no improvements after 1 5 years but 0 76 fewer sick days per month after 2 5 years suggesting the importance of looking beyond short term impacts reductions in sick days were largest in villages with more baseline health workers per capita consistent with improvements being sensitive to capacity constraints these results are robust to adjustments for multiple hypothesis testing

preschool education in brazil does public supply crowd out private enrollment this paper examines whether an expansion in the supply of public preschool crowds out private enrollment the paper uses rich data for municipalities in brazil from 2000 to 2006 where federal transfers to local governments change discontinuously with given population thresholds the results from a regression discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services but show no evidence of crowding out of private enrollment this finding is consistent with a theory in which households differ in their willingness to pay for preschool services and private suppliers optimally adjust prices in response to an expansion of lower quality free of charge public supply

long term educational consequences of secondary school vouchers evidence from administrative records in colombia colombia s paces program provided over 125 000 poor children with vouchers that covered the cost of private secondary school the vouchers were renewable annually conditional on adequate academic progress since many vouchers were assigned by lottery program effects can reliably be assessed by comparing lottery winners and losers estimates using administrative records suggest the paces program increases secondary school completion rates by 15 to 20 percent correcting for the greater percentage of lottery winners taking college admissions tests the program increased test scores by two tenths of a standard deviation in the distribution of potential test scores jel i21 j12 i28

agricultural spillover effects of cash transfers what does lewie have to say lewie simulations suggest that there are positive production spillovers fromsctprograms in nominal terms total production multipliers are always significantly greater than zero and income multipliers are always greater than one however real impacts depend on supply elasticities and market closure assumptions to date studies do not point to inflationary impacts of scts opm 2012a opm 2012b although the evidence on price effects is very limited this suggests that simulation 2 best characterizes the production impacts of scts which target poor economies with under utilized factors this simulation reveals a minimal inflationary impact and real production value added multipliers of 1 58 ksh per shilling transferred a key finding of lewie is that the production impacts are concentrated in nonbeneficiary households this is not surprising given the program s eligibility criteria which target the most asset and labor constrained households rcts focusing on treated households are likely to miss many or most of the productive impacts of social cash transfer programs this finding reaffirms the importance of a local economy wide approach if we wish to capture the transfers full impact finally our findings underline the importance of local supply constraints in shaping the impacts of transfer programs in the high unemployment environment characterizing rural kenya we believe it unlikely that there are significant labor constraints on production nevertheless production constraints limit program benefits particularly in nonbeneficiary households which are far and away the main source of new supply when production bottlenecks generate inflation transfers may even negatively affect some households interventions focusing on local production constraints in nonbeneficiary as well as beneficiary households may be needed to unlock the productive potential of scts

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

federal acid rain games abstract federal environmental policy designed to control acid rain is shaped after the hierarchy of the system and is controlled simultaneously by regional and central governments each governmental level controls one of two policy instruments pollution abatement production and pollution tax in a two stage game where regional governments are stackelberg leaders and control pollution taxes the subgame perfect equilibrium is socially efficient but the subgame perfect equilibrium for a two stage game where the central government is the stackelberg leader and controls pollution taxes is inefficient it corresponds to the nash equilibrium for a game where regional governments control both policy instruments

attachment to home and efficient purchases of population in a fiscal externality economy abstract this paper examines the efficiency properties of an economy characterized by strategically competing regions and individuals with varying degrees of attachment to home in an otherwise standard fiscal externality setting regional authorities may make interregional transfers in purchasing preferred populations however there is a range of distributions of resources over which neither region makes transfers nevertheless all equilibrium allocations resulting from the nash behavior of regional authorities including those that involve no transfers are efficient therefore in contrast to the standard conclusions of the fiscal externality literature there is no efficiency role for a central authority

explaining efficiency differences among large german and austrian banks cost efficiency scale efficiency and productivity change are estimated by data envelopment analysis and cost efficiency is regressed on explanatory variables no evidence is found for average productivity responding to deregulation over the period studied state owned banks are found to be more cost efficient likely owing to cheaper funds and cooperative banks to be about as cost efficient as private banks increasing economies of scale but decreasing economies of scope provide rationale for m as among banks with similar product portfolios interbank and capital market funding is found to be more cost efficient than deposits when the cost of retail networks is controlled

cash or condition evidence from a cash transfer experiment this brief summarizes the results of a gender impact evaluation study entitled cash or condition evidence from a cash transfer experiment conducted from 2008 to the end of 2009 in malawi the study observed the impact of conditionality in cash transfer programs with two distinct interventions unconditional transfers uct arm and transfers conditional on school attendance cct arm targeted at adolescent girls in malawi on individual level dropout rates declined in both treatment arms however the uct arm is 43 percent as large as the cct arm the fraction of days attended in the cct arm is significantly higher than the uct cognitive ability math and english scores significantly improve for the cct but not for the uct probability of pregnancy and marriage were much lower in the uct arm the delays in marriage and fertility in the uct arm are found entirely among adolescent girls who dropped out of school after the start of the intervention improvements in human capital for the recipients of the cct are achieved at the cost of worse outcomes for people who drop out of school funding for the study derived from the global development network bill and melinda gates foundation national bureau of economic research nber africa project world bank research support budget grant world bank knowledge for change trust fund world development report 2007 small grants fund spanish impact evaluation fund and gender action plan trust fund

optimal control of acid rain in a federation with decentralized leadership and information abstract we examine some aspects of the acid rain problem in the european union acid rain is a by product of electricity production and the eu is a federal system characterized by decentralized leadership that is regional governments are leaders and the center is a common follower regional governments design environmental policies and the center designs an interregional income redistribution policy in a setting with decentralized information information is decentralized in that an upwind regional power plant is privately informed about its technology we show that the subgame perfect equilibrium of a game with decentralized leadership and information is constrained socially optimal

the effect of food stamp cashout on food expenditures an assessment of the findings from four demonstrations using findings from four demonstrations we examine estimates of the effect on household food expenditures of converting food stamps into a cash transfer we provide arguments for why the estimate produced by one of the demonstrations should be regarded as an outlier the disparity in the difference in means estimates from the remaining three demonstrations is reduced when each is normalized by dividing by the average value of benefits in the respective demonstration site the normalized estimates imply a reduction in food expenditures of between 18 and 28 cents for each dollar of food stamps cashed out at the aggregate level these estimates imply that nationwide cashout would result in a reduction in household food spending of between 4 2 and 6 5 billion dollars whereas the associated reduction in the cost of administering the food stamp program would be about 0 3 billion dollars

the labeling effect of a child benefit system child benefit systems exist in many countries while they show a lot of differences in terms of eligibility rules amounts involved and implementation tax deduction tax credit or direct benefit the common motivation for their existence is to increase children s welfare in the dutch child benefit system the case i focus on in this paperone of the parents usually the mother is entitled to an untaxed child benefit amount which only depends on the child s age and the number of children in the household thus child support does not depend on household income marital status or labor market status as a result child benefit is exogenous to the household given the presence of children this is in contrast with the situation in many other countries including germany france the united kingdom and the united states where government provided child support is partly means tested see jonathan bradshaw et al 1993 in the netherlands child benefit is generally a nonnegligible addition to the household income the median share of child benefit in the total net income of households with children is 8 percent on the national level expenditures on child benefits amount to 1 2 percent of gnp the use of the child benefit is completely at the discretion of the parent there are no legal requirements that a certain amount be spent on particular goods or services nor does the government provide any guidelines regarding expenditure on children a policy question that arises is to what extent children benefit from child benefits standard microeconomic demand theory allows no role for effects of the composition of income given the fungibility of income sources it is only the sum of income components that is relevant in explaining expenditure patterns thus within that framework the answer would be that the marginal propensity to consume child goods from one guilder of child benefits is no different than from one guilder of any other income source in the more general class of gametheoretic models of household behavior however the composition of household income will generally affect expenditure patterns see e g shelly j lundberg and robert a pollak 1993 and martin browning et al 1994 if fathers and mothers have different preferences and mothers have control over child benefits the effect of child benefits on expenditures will differ from the effect of other income sources lundberg et al 1997 provide empirical evidence showing that a transfer of control over child benefits from fathers to mothers in the united kingdom due to a change in legislation resulted in a significant increase in expenditures on child clothing daniela del boca and christopher j flinn 1994 have analyzed the effect of income composition on expenditure decisions of divorced mothers they find that the coefficients associated with child support and alimony income differ from those for other income in engel curves for expenditures on childspecific goods their results can be explained in terms of a noncooperative nash model in which the child support transfer decisions of the noncustodial father and the expenditure decisions of the mother are determined simultaneously in contrast to del boca and flinn s analysis in which child support is a decision variable the present paper focuses on the possible differential effect of government provided child support which is truly exogenous in this paper i analyze the effects of child benefits on expenditures by running regressions in which child benefit enters as a separate explanatory variable the enipirical analysis is based on a time series of 17 cross section consumer expenditure surveys in the netherlands covering the period 1978 through 1994 it is important to note that in a single cross section it department of economics university of groningen p o b 800 9700 av groningen the netherlands e mail p kooreman eco rug nl i am indebted to two anonymous referees for constructive comments helpful comments were also provided by rob alessie maarten allers chris bojke werner de bondt bert schoonbeek and tom wansbeek i thank vincent linderhof for organizing the data financial support was provided by the dutch organization for scientific research nwo homes project grant

the political resource curse this paper studies the effect of additional government revenues on political corruption and on the quality of politicians both with theory and data the theory is based on a political agency model with career concerns and endogenous entry of candidates the data refer to brazil where federal transfers to municipal governments change exogenously at given population thresholds allowing us to implement a regression discontinuity design the empirical evidence shows that larger transfers increase observed corruption and reduce the average education of candidates for mayor these and other more specific empirical results are in line with the predictions of the theory jel d72 d73 h77 o17 o18

managerial efficiency in local government implications on jurisdictional consolidation using data from maine estimates of size economies in the production of public education services are provided under the alternative assumptions of managerial efficiency and inefficiency while size economies were identified under the traditional assumption of managerial efficiency limited or no size economies were identified under the more general assumption of managerial inefficiency these results question the validity of the traditional economies of size literature and the jurisdictional consolidation policy which follows from the traditional literature

transboundary environmental problems with mobile but heterogeneous populations most of the literature on transboundaryenvironmental problems treats population ineach country or region as constant ignoringpopulation mobility we showed previously thatif there is perfect population mobility betweenregions and populations are homogeneous asocially efficient outcome can be supported asa nash equilibrium of the game of uncoordinatedpolicy setting even without any internationalenvironmental agreement in the present paperwe introduce heterogeneous population and showthat when people differ a non cooperativeoutcome is generally inefficient we alsodemonstrate that for a particular set ofobjective functions for the regionalgovernments there is an equilibrium of thegame of uncoordinated policy setting that isefficient finally we give an example wherethe decentralized outcome is efficient whenthere is no population mobility butinefficient when there is population mobility

explaining differences in productive efficiency an application to belgian municipalities the purpose of this paper is to measure and explain variations in productive efficiency of municipal governments in belgium technical efficiency is evaluated using a non parametric method based on the free disposal hull fdh reference technology we first calculate input output and graph farrell efficiency measures for a cross section of all 589 belgian municipalities in a second stage of the analysis we explain the calculated differences in efficiency in terms of variables related to the structural characteristics of municipalities and to the institutional environment

wealth health and health services in rural rajasthan what are the determinants of health and of well being income and wealth are clearly part of the story but does access to health care have a large independent effect as the advocates of more investment in health care such as the world health organization s commission on macroeconomics and health commission on macroeconomics and health 2001 have argued this paper reports on a recent survey in a poor rural area of the state of rajasthan in india intended to shed some light on this issue where there was an attempt to use a set of interlocking surveys to collect data on health and economic status as well as the public and private provision of health care

the impact of positive and negative income changes on the height and weight of young children we estimate the impact of changes in unearned income on the height and weight of young children in a developing country as a source of income variation we use a change in the eligibility criteria

government in transition abstract the speed of economic reforms is not the only important determinant of the success of the transition to a market economy the transition of government from a communist state to an institution supporting a market economy is as critical survey evidence shows that russia lags significantly behind poland in the transition of its government which may account for its inferior economic performance despite adopting similar economic reforms i argue that the lack of turnover of old communist politicians and the creation of inappropriate electoral and fiscal incentives for these politicians may account for the poor performance of the russian government and suggest some strategies for improving the situation

an efficient mechanism to control correlated externalities redistributive transfers and the coexistence of regional and global pollution permit markets abstract we examine joint tradable permit markets as a self enforcing mechanism to control correlated externality problems by correlated we mean multiple pollutants that are jointly produced by a single source but which simultaneously cause differentiated regional and global externalities e g smog and global warming by self enforcing we mean a mechanism that accounts for the endogeneity that exists between competing jurisdictions in the setting of environmental policy within a federation of regions we find that joint domestic and international permit markets are pareto efficient for a wide class of preferences