does decentralization contribute to efficiency evidence from oecd countries abstractthis article provides evidence on the relationship between fiscal decentralization and technical efficiency we begin the first stage of this study with a data envelopment analysis to obtain technical efficiency estimates for a sample of 23 oecd countries over the period 1992 2009 in a second stage we explore the effects of fiscal decentralization and other control variables on technical efficiency the results including all the control variables reveal a statistically significant negative relationship between fiscal decentralization of public expenditure and technical efficiency

heterogeneity tournaments and hierarchies tournament contracts are characterized that simultaneously elicit first best efficient effort levels and self selection of risk neutral heterogeneous workers into ability specific contracts comparisons across self selected ability types are shown to be sometimes necessary to attain efficiency rationales are explored for not commonly observing such contracts in hierarchical organizations

promotions and incentives in partnerships evidence from major u s law firms this paper develops a model of promotions in partnerships and estimates the model using cross sectional data on major u s law firms promotions to partner screen associates for firm specific skills and they generate tournament incentives among associates competing for promotions the key parameters of the model are estimated by imposing the equilibrium restriction that firms offer equal utility to incoming associates the incentive component of compensation is found to be statistically significant and a nested model without promotion

intergovernmental fiscal transfers international lessons for developing countries abstract this paper reviews the central issues that arise in designing intergovernmental transfers and surveys the approaches adopted in a number of countries with special emphasis on developing countries since circumstances and objectives differ from country to country no simple uniform pattern of transfers is universally appropriate but experience around the world makes it clear that if services are to be efficiently provided transfers must be designed so that those receiving them have a clear mandate adequate resources sufficient flexibility to make decisions and are accountable for results

on the economic dividend of devolution rodriguez pose a and gill n 2005 on the economic dividend of devolution regional studies 39 405 420 recent political and academic discourse about devolution has tended to stress the economic advantages of the transfer of power from national to subnational institutions this economic dividend arises through devolved administrations ability to tailor policies to local needs generate innovation in service provision through inter territorial competition and stimulate participation and accountability by reducing the distance between those in power and their electorates this paper however outlines two related caveats first there are many forces that accompany devolution and work in an opposite direction devolved governmental systems may carry negative implications in terms of national economic efficiency and equity as well as through the imposition of significant institutional burdens second the economic gains as well as the downsides that devolution may engender are contingent to some

bringing the benefits of david to goliath special economic zones and institutional improvement abstractthe theory behind special economic zones sezs focuses on their role in overcoming broader policy failings in a country this paper hypothesizes that the ability of smaller countries to reform more quickly provides a theoretical missing link as to how sezs can assist reform developing the idea of sezs as a small country in a large country using a new database the paper tests this proposition by examining if sezs have actually been able to spur on institutional improvement in large countries results show that sezs do influence the institutional development of a country contingent upon prevailing institutional trends

luck effort and reward in an organizational hierarchy using the personnel records of a large british financial sector employer we investigate how workers respond to remuneration differences and luck in the promotion system the results confirm that workers respond to larger remuneration spreads by working harder increased certainty in the promotion process also has this effect there appears to be no difference between men s and women s reactions to promotion incentives gender differences in the raw data therefore appear not due to incentives we need to look elsewhere for an explanation

pay for percentile we propose an incentive scheme for educators that links compensation to the ranks of their students within comparison sets under certain conditions this scheme induces teachers to allocate socially optimal levels of effort moreover because this scheme employs only ordinal information it allows education authorities to employ completely new assessments at each testing date without ever having to equate various assessments this removes incentives for teachers to teach to a particular assessment form and eliminates opportunities to influence reward pay by corrupting assessment scales education authorities can employ separate no stakes assessment systems to track trends in scaled measures of student achievement jel i21 i28 j33 j45

the influence of decentralized taxes and intergovernmental grants on local spending volatility abstractthe influence of decentralized taxes and intergovernmental grants on local spending volatility regional studies this paper studies what affects the volatility of sub central public spending in 20 organisation for economic co operation and development oecd countries the evidence based on data from 1972 to 2007 shows that the volatility of intergovernmental grants from upper levels is positively associated with the volatility of local expenditure on the other hand the volatility of local tax revenues mainly that of property taxes exerts the opposite effect these findings suggest that making local governments rely more on grants than own tax revenues adversely affects their spending stability allowing them to levy autonomously taxes relying on responsive tax bases provides incentives to smooth their expenditure

governance in the english regions the role of the regional development agencies in the absence of regional government new labour has pursued a process of administrative decentralisation in the english regions outside london including the appointment of regional development agencies rdas charged with stimulating economic modernisation and assisting in reducing regional economic disparities they have acquired a key position as strategic power brokers situated between the agendas of whitehall and the demands of sub national interests rdas operate however within complex competing structures tied to meeting nationally determined targets and too little attention has been given to capturing their overall effectiveness reflecting new labour s rejection of the need for a more even spread of economic activity between regions rdas also lack sufficient resources to make a significant impact on economic disparities treasury led reforms could see the agencies taking responsibility for preparing single regional strategies but there are contradictions between their remit to increase economic growth and deliver social and environmental objectives

regional economic disparities and decentralisation the study of the influence of decentralisation on economic growth has received some attention in recent years but very few studies deal with its impact on regional inequalities this paper analyses the impact of both fiscal and political decentralisation on regional inequalities using alternative measures for a sample of 17 oecd countries in order to check for other possible influences the study also includes measures of public sector size and the type of party in government the final section studies the relevance of fiscal decentralisation in the regional convergence process observed by several authors during the past two decades the research reveals a strong negative correlation between decentralisation especially fiscal decentralisation and regional inequalities and also a positive influence of decentralisation on regional convergence

difference in interim performance and risk taking with short sale constraints abstract absent much theory empirical works often rely on the following informal reasoning when looking for evidence of a mutual fund tournament if there is a tournament interim winners have incentives to decrease their portfolio volatility as they attempt to protect their lead while interim losers are expected to increase their volatility so as to catch up with winners we consider a rational model of a mutual fund tournament in the presence of short sale constraints and find the opposite interim winners choose more volatile portfolios in equilibrium than interim losers several empirical works present evidence consistent with our model however based on the above informal argument they appear to conclude against the tournament behavior we argue that this conclusion is unwarranted we also demonstrate that tournament incentives lead to differences in interim performance for otherwise identical managers and that mid year trading volume is inversely related to mid year stock return

should the fiscal powers of the northern ireland assembly be enhanced abstractshould the fiscal powers of the northern ireland assembly be enhanced regional studies northern ireland has been characterized by an inability to narrow the persistent economic gap relative to britain some commentators have suggested that regional corporation tax variation may be the game changer in closing this gap this paper draws on a range of studies that help one better understand the historical and institutional context however the analysis of tax variation is broader than this consideration is given as to which taxes might be the most suitable candidates for devolution while greater tax variations could certainly complement an emphasis on increased competitiveness aimed at improving economic outcomes they are no substitute for such a focus as is often the case in institutional and economic development issues of sequencing and policy capacity are salient

state rescaling and economic convergence abstractthis paper critically engages with state space theory by interrogating the soundness of its fundamental assumptions regarding the rescaling of capitalism and by questioning the validity of

fund families as delegated monitors of money managers because a money manager learns more about her skill from her management experience than outsiders can learn from her realized returns she expects inefficiency in future contracts that condition exclusively on realized returns a fund family that learns what the manager learns can reduce this inefficiency cost if the family is large enough the family s incentive is to retain any given manager regardless of her skill but when the family has enough managers it adds value by boosting the credibility of its retentions through the firing of others as the number of managers grows the efficiency loss goes to zero

moral hazard in corporate investment and the disciplinary role of voluntary capital rationing this paper compares three capital budgeting rules the npv rule a high hurdle rate and capital rationing and explains why some firms may voluntarily impose capital rationing under both capital rationing and a high hurdle a restrictive investment criterion is used to control managerial shirking however implementation of these budgeting rules requires a mechanism to prevent the firm from expanding the investment scale ex post capital rationing in the form of a predetermined fixed budget differs from the high hurdle rate rule in that the former requires the firm to overcome the cost of raising additional capital before making further investment

the impact of fiscal decentralization on the composition of public expenditure panel data evidence from italy grisorio m j and prota f the impact of fiscal decentralization on the composition of public expenditure panel data evidence from italy regional studies this paper is an original contribution to the understanding of the relationship between fiscal decentralization and public expenditure composition it studies the effects of the ongoing decentralization process in italy on the share of different categories of public spending in total expenditure of the italian regional administrations over the period 1996 2008 the data used allow one to go beyond the usual distinction between current and capital expenditures and to present a functional classification of public expenditures through a panel data analysis the paper shows that the level of decentralization influences the composition of expenditure

devolving fiscal policy migration and tax yields abstractdevolution of taxes to sub national jurisdictions could reduce expected tax revenue if some households move to lower tax regimes constraining devolved government policy this paper develop

moral hazard and renegotiation in multi agent incentive contracts when each agent makes a renegotiation offer abstract the purpose of this paper is to explore a mechanism for implementing the desired equilibrium actions in the one principal multi agent model with renegotiation when each agent is allowed to make a renegotiation offer with some belief restriction we show that there exists a mechanism in which the second best strategy is always implemented

fiscal stability during the great recession putting decentralization design to the test this paper provides an empirical analysis aimed at disentangling the roles played by decentralization level and design as well as the extended decentralized framework provided by subnational borrow

distributive politics and spatial equity the allocation of public investment in chile abstractdistributive politics and spatial equity the allocation of public investment in chile regional studies this paper analyzes the influence of electoral concerns on investment distribution from the central government to chilean municipalities drawing upon panel data it shows that investment is mediated by pork barrel and political budget cycles as well as favouring the relatively better off areas estimations also reveal that resources are channelled to the municipalities where the vote margin in local elections is larger whereas national results are not relevant indicating that local governments lobbying capacity is prioritized over national electoral interests based on these results the implications for regional governance and for reducing the margin of arbitrary allocations are discussed

does devolution increase accountability empirical evidence from the implementation of european union cohesion policy polverari l does devolution increase accountability empirical evidence from the implementation of european union cohesion policy regional studies the period from the late 1990s to the early 2000s witnessed trends of decentralization deconcentration or devolution of competencies from the national to the sub national levels in a variety of countries implicit or explicit in many of the discussions about devolution is the assumption that by bringing the design and delivery of policy closer to the people it increases accountability the main proposition of this paper is to test this common assumption focusing as a test case on the implementation of european union cohesion policy in two meso level territorial units with recent experience of devolution the paper investigates empirically whether the new devolved institutional framework within which the policy operates is indeed more conducive to accountability