is there a bright side to a black market for inkind transfers a number of recent studies analyze inkind transfer programs while acknowledging the presence of a black market 3 4 9 however the black market for inkind transfers typically finds its way into these analyses only in terms of the recipients ability to sell their inkind transfers as such it is viewed as undesirable and as a leakage from the program in this study i take a more complete view of black markets and the policy opportunities they present and i discover that black markets may instead have desirable consequences this research takes a different approach to the study of inkind transfers and black markets by acknowledging the existence of both sides of the black market demand as well as supplyand by exploring the possibility that government policy may be able to exploit the black market incentive this approach yields results that often contradict those from existing analyses and suggest that a black market under certain conditions may reallocate resources efficiently and perhaps equitably and can reduce the cost of inkind transfer programs to the government while maintaining or even improving the well being of recipients finally while this study focuses on the food stamp program as an example its implications can be extended to other inkind transfer programs the next section reviews the standard economic and econometric analyses of inkind transfer programs and then examines how they are affected by acknowledging the demand side of the black market in section iii i construct a simple theoretical model to aid in identifying the likely buyers of illegal food stamps section iv explores ways to make desirable use of the existence of a black market incentive and proposes an alternative program that lowers costs by exploiting this incentive section v contains conclusions

equality of opportunity and optimal cash and in kind policies abstract this paper examines the argument for public provision of certain private goods like education and health based on equality of opportunity by studying the utility possibility frontier of a society in which there is a concern for the distribution of these goods a given quality of education or health services can be consumed for free in the public sector but people can opt out and purchase their desired quality levels in the private sector some of the conclusions are i a pure cash transfer is optimal when the utility redistribution is either sufficiently small or large ii if and only if both the equality of opportunity concern and the utility redistribution are large enough can an in kind program which attracts the whole population be justified iii even when everybody chooses the in kind program it may be optimal to perform some additional utility redistribution by increasing the size of such program

workfare wellbeing and consumption evidence from a field experiment with kenya s urban poor abstract restrictions like work requirements and constraints on voucher transfers are often used in social welfare systems but little empirical evidence exists on their impact on wellbeing we conducted a 10 day randomized experiment with 432 individuals living below the poverty line in the kawangware settlement of nairobi kenya testing two elements of social welfare design workfare versus welfare and restricted versus unrestricted vouchers participants were randomly assigned to a work condition involving daily work for unrestricted vouchers or one of two wait conditions involving daily waiting for vouchers that were either unrestricted or partially restricted to staple foods we find that working improved psychological wellbeing relative to waiting suggesting that the means of implementing welfare programs may have important effects on individuals beyond the impact of monetary benefit alone furthermore although the restrictions were inframarginal partially restricted vouchers crowded in spending on staple foods suggesting the existence of a flypaper effect in spending from restricted vouchers

evaluating welfare reform in the united states this paper reviews the economic literature on welfare reform over the 1990s a brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes the paper then critically reviews the econometric and experimental literature on caseload changes labor force changes poverty and income changes and family formation changes a growing body of evidence suggests that recent policy changes have influenced economic behavior and well being one particular set of new style welfare programs seems to show especially promising results with significantly increased work and earnings and reduced poverty

risk allocation and the costs and benefits of public private partnerships we study the agency costs of delegated public service provision focusing on the link between organizational forms and uncertainty at project implementation we consider a dynamic multitask moral hazard environment where the mapping between efiort and performance is ex ante uncertain but new information may come along during operations our analysis points out at the e ciency gains that bundling planning and implementation as under public private partnerships can bring in terms of better project design and lower operational costs bundling also results in increasingly better performance as uncertainty is reduced by growing experience in the sector bundling should instead be viewed with caution when the private sector seeks to radically innovate on public service provision or to introduce new services but lacks the knowledge and expertise to anticipate the impact of the innovative design procedure technology on the cost of operations the compounding of asymmetric information ex post plus moral hazard and renegotiation may generate diseconomies of scope in agency costs which for high operational risk can make unbundling optimal in this context the use of private flnance can help re establishing the beneflt of bundling only if lenders have su cient expertise to help assessing project risks

the impact of agricultural research in africa aggregate and case study evidence abstract this paper presents case study results and aggregate data to evaluate the impact of research in african agriculture of 32 case studies all but eight report annual returns over 20 and many are far higher with most gains arising in the late 1980s and 1990s spurred by policy reforms and changing incentives these innovations have led to sustained growth in aggregate cereal crop yields since 1985 africa s belated green revolution is based on new varieties often with early maturation for drought escape complemented by new management techniques typically labor intensive efforts to conserve soil moisture and build soil fertility

targeting assistance to the poor efficient allocation of transfers when household income is not observed abstract this paper examines the problem of how to transfer money or other forms of assistance to poor households when one observes some characteristics of households but not their incomes this and related issues are often referred to as the targeting problem the paper first sets out the problem formally as one of minimizing a poverty index given a fixed amount of money available for transfers assuming that household survey data are available which include accurate income and or expenditure information the solution for the problem is formulated as a non linear mathematical programming exercise using household survey data from cote d ivoire the technique is applied to both urban and rural areas separately the paper concludes with a general discussion and suggestions for future research

optimality of workfare with heterogeneous preferences with the standard non linear income taxation framework with heterogeneity of preferences in this paper the optimality of workfare as a screening tool is examined it is assumed that workfare does not serve as a human capital investment participation is mandatory and administrative costs are negligible imposing alternative cardinalizations on individuals utilities allows for the possibility that the government optimally redistributes income to or from high disutility of labour individuals under either case it is never optimal to impose workfare on these individuals it is also shown that non productive workfare can be an e cient policy tool in contrast to the results found in besley and coate 1995 brett 1998 and beaudry and blackorby 1997 jel classification h21 h23 optimalite du workfare en presence de preferences heterogenes l auteur examine l timalite du workfare en tant qu instrument de tamisage a l aide du cadre conceptuel traditionnel d imposition non lineaire des revenus en presence de preferences heterogenes on postule que le workfare n est pas un processus d investissement en capital humain que la participatioun est obligatoire et que les couts d administration sont negligeables quand on postule aussi des utilites cardinales differentes pour les individus il devient possible pour le gouvernement de redistribuer optimalement les revenus en faveur ou au detriment des individus pour qui le travail a une tres grande desutilite dans l un et l autre cas on montre que le workfare n est jamais une politique optimale on montre aussi que le workfare dans des activites non productives peut etre un instrument de politique publique e cient contrairement a ce qu a rment besley et coate 1995 brett 1998 et beaudry et blackorby 1997

in kind transfers self selection and optimal tax policy abstract this paper examines the role of public provision of goods as a redistributive mechanism when tax policies are designed optimally on the basis of the information available to the government we characterize pareto efficient allocations that are attainable through the tax policy and derive the conditions under which public provision will enhance welfare above the maximum that can be achieved through a mix of a general income tax and commodity taxes price subsidies first when there are two produced goods we prove that public provision is always pareto improving the improvement is achieved through changing individuals actual consumption levels second with no restrictions on the number of goods we derive a sufficient condition for public provision to be pareto improving this is achieved by weakening self selection constraints so that welfare improving tax changes are made possible suitable examples include provision of day care basic health care and rights to a minimum old age pension

modelling the take up of state support abstract we discuss the modelling of the take up of state support by going beyond the standard analysis and recognising that both the researcher and the welfare agency make errors is assessing entitlement we apply the discussion to an examination of the take up of supplementary benefits in britain by explicitly modelling the costs to taking up state support we can illustrate how these costs can dampen the welfare impact of state support and mitigate or aggravate welfare agency errors in assessing entitlement

agriculture in the global economy agriculture is diverse and full of contradictions the sector accounts for a griculture is diverse and full of contradictions the sector accounts for a comparatively small share of the global economy but remains central comparatively small share of the global economy but remains central to the lives of a great many people in 2012 of the world s 7 1 billion to the lives of a great many people in 2012 of the world s 7 1 billion people an estimated 1 3 billion 19 percent were directly engaged in farming people an estimated 1 3 billion 19 percent were directly engaged in farming but agriculture including the relatively small hunting fi shing and forestry sectors but agriculture including the relatively small hunting fi shing and forestry sectors represented just 2 8 percent of overall income world bank 2012 however in represented just 2 8 percent of overall income world bank 2012 however in today s middle and low income countries where most of the world s farmers are today s middle and low income countries where most of the world s farmers are to be found agriculture accounts for a much greater share of national income and to be found agriculture accounts for a much greater share of national income and employment for instance in india agriculture represents 18 percent of national employment for instance in india agriculture represents 18 percent of national income and 54 percent of employment income and 54 percent of employment 1

income distribution and price controls targeting a social safety net during economic transition abstract during the ongoing post communist economic transitions the relative well being of many people is changing rapidly and governments are not well positioned to accurately measure individual living standards under such circumstances continued price controls over basic consumer goods within the state sector and the associated queuing can form a serviceable device for targeting poor people for subsidies with a fixed price state sector and free price parallel markets rich people might choose to avoid queues and shop in the free markets while poor people would prefer to pay low nominal prices and queue in the state sector the targeting of subsidies through queues therefore can be accomplished even if the government has no information concerning individual income or living standards when the alternative to price controls is a poorly targeted explicit social safety net the resource cost of queues might be more than offset by an improvement in the targeting of subsidies

transfers in cash and in kind theory meets the data we review theoretical explanations for in kind transfers in light of the limited empirical evidence after reviewing the traditional paternalistic arguments we consider explanations based on imperfect information and self targeting we then discuss the large literature on in kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations including the samaritan s dilemma pecuniary effects credit constraints asymmetric information amongst agents and political economy considerations our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in kind transfer programs but that some of the other arguments may apply to specific cases political economy considerations must also be part of the story

the price effects of cash versus in kind transfers this article examines the effect of cash versus in kind transfers on local prices both types of transfers increase the demand for normal goods in kind transfers also increase supply in recipient communities which could lead to lower prices than under cash transfers we test and confirm this prediction using a programme in mexico that randomly assigned villages to receive boxes of food trucked into the village equivalently valued cash transfers or no transfers we find that prices are significantly lower under in kind transfers compared to cash transfers relative to the control group in kind transfers cause a 4 fall in prices while cash transfers cause a positive but negligible increase in prices in the more economically developed villages in the sample households purchasing power is only modestly affected by these price effects in the less developed villages the price effects are much larger in magnitude which we show is due to these villages being less tied to the outside economy and having less competition among local suppliers

psychological frictions and the incomplete take up of social benefits evidence from an irs field experiment we address the role of psychological frictions in the incomplete take up of eitc benefits with an irs field experiment we specifically assess the influence of program confusion informational complexity and stigma by evaluating response to experimental mailings distributed to 35 050 tax filers who failed to claim 26 million despite an initial notice while the mere receipt of the mailing simplification and the heightened salience of benefits led to substantial additional claiming attempts to reduce perceived costs of stigma application and audits did not the study and accompanying surveys suggests that low program awareness understanding and informational complexity contribute to the puzzle of low take up jel c93 d03 h24 m38

topping up or opting out the optimal design of public provision schemes there is extensive public provision of private goods in all developed countries the public provision scheme is often designed so that individuals can opt out but not top up supplement the publicly provided quantity quality using an optimal income ta

can workfare programs moderate conflict evidence from india can public interventions persistently reduce conflict adverse weather shocks through their impact on incomes have been identified as robust drivers of conflict in many contexts an effective social insurance system moderates the impact of adverse shocks on household incomes and hence could attenuate the link between these shocks and conflict this paper shows that a public employment program in india by providing an alternative source of income through a guarantee of 100 days of employment at minimum wages effectively provides insurance this has an indirect pacifying effect by weakening the link between productivity shocks and incomes the program uncouples productivity shocks from conflict leading persistently lower conflict levels

public goods self selection and optimal income taxation using the self selection approach to tax analysis this paper derives a modified samuelson rule for the provision of public goods when the government deploys an optimal nonlinear income tax this approach gives a straightforward interpretation of the central result in this area generalises it and provides a simple characterisation of optimal policy in a wide range of circumstances the analysis also emphasises and clarifies the significance of the choice of numeraire for the optimality of decentralising public spending decisions it is well known that the famous samuelson rule for the provision of public goods may not be applicable when the tax revenues used to finance the public goods come from distorting taxes the principle was recognized as long ago as pigou 1947 long before the samuelson rule was devised pigou saw that in addition to the resource cost involved in transferring funds from the private to the public sector there was a deadweight loss involved from this insight he suggested that the criterion for providing public goods should be more stringent than the samuelson rule would later suggest in particular one might expect that the inclusion of the deadweight loss of taxes as part of the cost of providing a public good would lead to a reduction in its optimal provision relative to a situation in which lump sum taxes were available the problem was investigated more systematically by atkinson and stern 1974 who considered the case in which a public good is financed by a set of optimal commodity taxes all individuals were assumed to be identical so efficiency alone dictated the objective they found that no prima facie case could be made for the pigou position that the use of distortionary taxes called for a reduction in the supply of the public good their analysis clearly showed that there were two influences at work when the financing of a public good was by distorting taxes on the one hand

targeting the poor evidence from a field experiment in indonesia the brief summarizes the targeting the poor evidence from a field experiment in indonesia for the period december 2008 january 2009 this paper reports an experiment in 640 indonesian villages on three approaches to target the poor proxy means tests pmt where assets are used to predict consumption community targeting where villagers rank everyone from richest to poorest and a hybrid defining poverty based on ppp 2 per capita consumption community targeting and the hybrid perform somewhat worse in identifying the poor than pmt though not by enough to significantly affect poverty outcomes for a typical program elite capture does not explain these results instead communities appear to apply a different concept of poverty

measuring corruption in infrastructure evidence from transition and developing countries abstract this paper examines what we can say about the extent and impact of corruption in infrastructure using existing evidence there is evidence that most perceptions measures appear to be very weak proxies for the actual extent of corruption in the infrastructure sector largely but inaccurately measuring petty rather than grand corruption survey evidence is more reliable but limited as a tool for differentiating countries in terms of access to infrastructure finance or appropriate policy models the paper suggests that a focus on bribe payments as the indicator of the costs of corruption in infrastructure may be misplaced

optimal redistribution with productive social services publicly provided private goods are conventionally considered consumer goods departing from this perspective we analyze the public provision of inputs that improve household productivity e g education and childcare in a two class economy with distorting taxation public provision is always welfare improving with respect to pure taxation given that the public input directly affects household productivity moreover the case for public provision strengthens as households heterogeneity in input demand fades out contrary to consolidated results in the literature the features of optimal provision schemes depend on the nature of publicly provided input namely if it substitutes household productive capacity or just helps households to exploit it

do low income housing subsidies increase the occupied housing stock abstract a necessary condition for justifying a policy such as subsidized low income housing either via tenant based rental assistance or construction of public or private projects is that it has a real effect on market outcomes in this paper we examine one aspect of the real effect of subsidized housing does it increase the housing stock if subsidized housing raises the quantity of occupied housing per capita either more people are finding housing or they are being housed less densely on the other hand if subsidized housing merely crowds out equivalent quality low income housing that otherwise would have been provided by the private sector the housing policy may have little real effect on housing consumption using both census place and msa level data from the decennial census and from the department of housing and urban development we ask whether housing markets with more subsidized housing also have more total housing after accounting for housing demand we find that government financed units raise the total number of units in a market although on average one government subsidized unit adds only one third to one half of a unit to the total housing stock there is less crowd out in more populous markets and more crowd out in places where there is less excess demand for subsidized housing as measured by the number of government financed units per eligible person tenant based housing programs such as section 8 certificates and vouchers seem to be more effective than project based programs at targeting subsidized housing units to people who otherwise would not have their own

can higher prices stimulate product use evidence from a field experiment in zambia the controversy over how much to charge for health products in the developing world rests in part on whether higher prices can increase use either by targeting distribution to high use households a screening effect or by stimulating use psychologically through a sunk cost effect we develop a methodology for separating these two effects we implement the methodology in a field experiment in zambia using door to door marketing of a home water purification solution we find evidence of economically important screening effects by contrast we find no consistent evidence of sunk cost effects jel c93 d12 i11 m31 o12

large cash transfers to the elderly in south africa we examine the social pension in south africa where large cash sums about twice the median per capita income of african households are paid to people qualified by age but irrespective of previous contributions we present the history of the scheme and use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings in south africa a large social pension about twice the median per capita income of african households is paid in cash to people qualified by age irrespective of previous contributions we present the history of the scheme and explain how such large transfers could come about in an economy in which the recipients were not only politically weak but without any political representation whatsoever we then use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings the pressing policy issue for south africans is whether it makes sense to target seven billion rand nearly 2 billion of social expenditure through the current pension schemes our analysis contributes to the discussion by documenting the redistributive and behavioural effects of the transfers we find that at least as far as immediate incidence is concerned and without allowance for behavioural effects the social pension is an effective tool of redistribution and that the households it reaches are predominantly poor because so many of the elderly among south africa s african population live with children the social pension is also effective in putting money into house

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

investment in education and the time inconsistency of redistributive tax policy time inconsistency of tax policy is shown to arise in a setting where households differ in their ability to accumulate wealth and where the government has redistributional objectives it is assumed that wealth accumulation takes the form of human capital acquired through education the government is precluded from redistributing to a first best optimum by a self selection constraint the second best is shown to be time inconsistent in the time consistent optimum households underinvest in education an argument can be made for public intervention in the provision of education

do non monetary prices target the poor evidence from a field experiment in india monetary price subsidies are often used to increase take up of health products but monetary prices may screen out those with the highest returns the poor using willingness to pay wtp data from a field experiment in india this paper determines whether nonmonetary prices better target health products to the poor than monetary prices it is found that monetary wtp is increasing in income and nonmonetary wtp is weakly decreasing in income comparing across price types nonmonetary wtp falls relative to monetary wtp as income rises nonmonetary prices better target the poor than monetary prices a larger fraction of total demand is poor

targeting in medicaid the costs and enrollment effects of medicaid s citizenship documentation requirement abstract the deficit reduction act of 2005 imposed a federal requirement that all individuals provide citizenship documentation when applying for or renewing medicaid coverage this represented a change in policy for 46 states using differences in differences to analyze data from the current population survey 2004 2008 this paper shows that the policy reduced medicaid enrollment among non citizens as intended and did not significantly affect citizens one in four adult non citizens in medicaid 390 000 total and one in eight child non citizens 81 000 were screened out by the policy annually child non citizens were more likely to become uninsured afterwards while adult non citizens appeared to shift from medicaid to other coverage overall the citizenship documentation requirement reduced medicaid participation among non citizens in an appropriately targeted way nonetheless a cost benefit analysis indicates that the policy was a net loss to society of 600 million through increased state administrative spending and compliance costs imposed on u s citizens applying for medicaid

impacts of food crop improvement research evidence from sub saharan africa abstract the paper reviews and summarizes evidences of impacts of crop improvement research of major food crops in africa it provides evidence of increased availability of improved varieties of major food crops to farmers in africa increased food production in regions where adoption has occurred and positive returns to research investment indicating that agricultural research in africa has had productivity increasing impacts on its agriculture however research impacts vary considerably across countries and regions within a country as a result of agroclimatic factors and policy environment which affects the supply of seeds and other inputs and the continuity and stability of research investments the paper points to a number of important issues both internal and external to the agricultural research system organization that need to be addressed if agricultural research is to provide a stimulus for modernizing african agriculture given the small size of food crop production area in many african countries it is important for research systems to take full advantage of research spill ins from regional and international research organizations there is a great potential to increase the efficiency of research systems by improving the coordination among members of national research systems and continuing improvements in collaborations between narss and regional and international organizations

self selection via fringe benefits this paper extends the theory of self selection to circumstances in which economic agents have some access to markets we use the analysis to explain the existence of multidimensional compensation packages in the presence of limited re marketability employment contracts that include fringe benefits are prominent examples of such multidimensional packages

take up and targeting experimental evidence from snap this paper develops a framework for evaluating the welfare impact of various interventions designed to increase take up of social safety net programs in the presence of potential behavioral biases we calibrate the key parameters using a randomized field experiment in which 30 000 elderly individuals not enrolled in but likely eligible for the supplemental nutrition assistance program snap are either provided with information that they are likely eligible provided with this information and also offered assistance in applying or are in a status quo control group only 6 percent of the control group enrolls in snap over the next 9 months compared to 11 percent of the information only group and 18 percent of the information plus assistance group the individuals who apply or enroll in response to either intervention receive lower benefits and are less sick than the average enrollee in the control group the results are consistent with the existence of optimization frictions that are greater for needier individuals suggesting that the poor targeting properties of the interventions reduce their welfare gains

optimal minimum wage policy in competitive labor markets this paper provides a theoretical analysis of optimal minimum wage policy in a perfectly competitive labor market and obtains two key results first we show that a binding minimum wage while leading to unemployment is nevertheless desirable if the government values redistribution toward low wage workers and if unemployment induced by the minimum wage hits the lowest surplus workers first importantly this result remains true in the presence of optimal nonlinear taxes and transfers in that context a binding minimum wage enhances the effectiveness of transfers to low skilled workers as it prevents low skilled wages from falling through incidence effects second when labor supply re sponses are along the extensive margin only the co existence of a minimum wage with a positive tax rate on low skilled work is always second best pareto ineffcient a pareto improving policy consists of reducing the pre tax minimum wage while keeping constant the post tax minimum wage by increasing transfers to low skilled workers and financing this reform by increasing taxes on higher paid workers overall our results imply that the minimum wage and subsidies for low skilled workers are complementary policies pa

returns to food and agricultural r d investments in sub saharan africa 1975 2014 research enabled growth in agricultural productivity is pivotal to sub saharan africa s overall economic growth prospects yet investments in research and development rd median 38 0 py around 78 5 of the evaluations relate to the commodity specific consequences of agricultural research while 5 5 report on the returns to an all agriculture aggregate the weight of commodity specific evaluation evidence is not especially congruent with the composition of agricultural production throughout africa nor to the best that can be determined the commodity orientation of public african agricultural r d

targeting transfers through restrictions on recipients our objective is to design transfer programs that maximize some social welfare function following the optimal income tax formulation we assume that a random process endows individuals with characteristics that influence welfare such as ability to earn income medical condition or unmonitorable income the goal is to maximize the utility of a randomly chosen individual other individualistic social welfare functions would lead to equivalent results if the random characteristics were observable a first best outcome could be achieved by making them the basis for lump sum transfers in practice however we can observe only indicators of these characteristics such as earnings medical expenditures or consumption patterns the challenge for policy is to design an efficient second best transfer program based on indicators in this paper we argue that 1 an optimal transfer program in general must sacrifice productive efficiency to target efficiency this is done by imposing restrictions on the choices made by intended beneficiaries 2 a program that incorporates restrictions such as means tested in kind transfers commodity specific taxes and subsidies and even ordeals i e the imposition of deadweight costs to qualify for a transfer will perform better than programs that rely solely on income taxes and cash transfers

the effect of disability payments on household earnings and income evidence from the ssi children s program abstract i estimate the effect of removing children with disabilities from supplemental security income ssi on parental earnings and household disability receipt using administrative data from the social security administration ssa i implement regression discontinuity and differencein differences designs based on changes in ssa s budget for child medical reviews i find that parents fully offset the ssi loss with increased earnings and the loss of the child s ssi payment reduces disability applications by parents and siblings but does not reduce their actual disability receipt i examine alternative hypotheses for the large parental earnings response

re examining the reported rates of return to food and agricultural research and development reply hurley rao and pardey 2014 analytically and empirically evaluate the internal rate of return irr vis a vis the modified internal rate of return mirr for investments in agricultural research and development r d they find that estimates of the irr are 2 5 to 5 times larger than the mirr for a wide range of assumptions leading them to question the value of the irr as a metric to represent the rate of return to agricultural r d oehmke 2016 defends the irr by arguing that it has important properties that the mirr does not possess in this article we critically examine these properties demonstrating that some are not inherent to the mirr for other properties we simply disagree with oehmke s assessment of their desirability therefore we are not compelled to change our original recommendation

distinguishing income from substitution effects in disability insurance a set of studies conducted over the last 15 years has produced a near consensus that the social security disability insurance system ssdi has substantial disincentive effects on the labor supply of near elderly males diminishing labor force participation increasing the sensitivity of labor force exit decisions to adverse economic shocks and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the social security retirement program yet efforts by the social security administration ssa to encourage labor supply among the disabled by removing the work disincentives built into ssdi have been almost entirely unsuccessful most notably in 1999 congress authorized the ticket to work program which provides an array of inducements for current ssdi beneficiaries to take up employment including permitting a trial work period of up to nine months providing 7 75 years of ongoing medicare eligibility following return to work and providing three years of automatic benefit reinstatement when claimants workplace earnings fall below a threshold level each of these steps reduces the implicit tax placed on labor supply by the ssdi program despite these lures fewer than 1 400 0 01 percent of the 12 2 million tickets issued to date have led to successful workforce integration autor and duggan 2006

the place of agricultural research in the development of sub saharan africa abstract outside sub saharan africa ssa agricultural research ar yields excellent returns why does ssa get so little from its major ar effort why do its ar scientists cost more yet produce less smallness of countries and research stations dispersion and high turnover make it hard to attain a critical mass of national ar scientists to remedy this they could concentrate on a few problems and crops yet they have neglected many of the most important e g cassava and overstressed export crops in other ways too european biases have distorted african ar socioeconomists moreover have entered research design too little and too late above all current domestic funds have been too scanty and unreliable to adequately support international and capital account ar efforts this lack of steady commitment illustrates ar s need for direction from clearer agricultural policy based on radically improved information and recognizing ssa s dramatic rise in labor land ratios guidelines for such policy are indicated within these a formalized and poverty oriented ar design system is suggested

self screening in targeted public transfer programs the self screening properties of initial eligibility determination a mechanism often under the control of the administrators of targeted transfer programs are derived and the use of this mechanism in the social security disability insurance system is explored empirically an increase in the rigor of initial eligibility screening may discourage potential applicants because they are unaware of appeal prospects and because the eligibility decision delay is lengthened as denied applicants are forced to appeal their claims in the disability program a 10 percent increase in the initial denial rate induces a 4 percent decrease in applications self selection is nonperverse

privatisation discontent and utility reform in latin america abstract privatisation faces strong and increasingly popular opposition in latin america this paper uses individual data on social attitudes socioeconomic status and demographic information from three waves of latinobarometro surveys 1998 2000 and 2002 in 17 countries to study the role of privatisation of utilities and its distributional impact we find that disagreement with privatisation is most likely when the respondent is on a low to middle income and when it involves a high proportion of public services such as water and electricity this complements recent empirical research that points to distributional concerns in the implementation of privatisation in latin america particularly because of inadequate regulation of utilities

assigning resources to budget constrained agents this article studies different methods of assigning a good to budget constrained agents schemes that assign the good randomly and allow resale may outperform the competitive market in terms of utilitarian efficiency the socially optimal mechanism involves random assignment at a discount an in kind subsidy and a cash incentive to discourage low valuation individuals from claiming the good copyright oxford university press

price subsidies diagnostic tests and targeting of malaria treatment evidence from a randomized controlled trial author s dupas pascaline cohen jessica schaner simone abstract both under and over treatment of communicable diseases are public bads but efforts to decrease one run the risk of increasing the other using rich experimental data on household treatment seeking behavior in kenya we study the implications of this tradeoff for subsidizing life saving antimalarials sold over the counter at retail drug outlets we show that a very high subsidy such as the one under consideration by the international community dramatically increases access but nearly half of subsidized pills go to patients without malaria we study two ways to better target subsidized drugs reducing the subsidy level and introducing rapid malaria tests over the counter

the negative income tax and the evolution of u s welfare policy the negative income tax proposed by milton friedman represents one of the fundamental ideas of modern welfare policy however the academic literature has raised two difficulties with it one challenging its purported work incentives and the other suggesting the possible superiority of work requirements in addition work requirement approaches have gained ground in actual u s welfare policy over the last 30 years and the number of different programs has proliferated another development counter to the negative income tax on the other hand the earned income tax credit has produced a negative income tax like program on a vast scale

subsidies as sorting devices abstract the divergence between tax payments and the cost of providing public services that arise from financing local public services provides an incentive for higher income communities to deter the entry of lower income households into their community here we demonstrate that higher income households to insure that low income households do not enter their community or reduce the number that do enter subsidize goods consumed by higher income households more than by lower income households this strategy will make the rich community less attractive to the poor deterring their entry to the community

public economics and the theory of public policy when james mirrlees and william vickrey were awarded the nobel prize in economics last year it marked only the third time that the award had gone to scholars of public sector economics in contrast to the reception given to the previous two winners ronald coase and james buchanan the news was greeted with some bewilderment by policy specialists once removed from the academic literature who are mirrlees and vickrey and what have they done that has been of lasting benefit to the study of public economics let alone of practical benefit to policy makers this seems to me to be a fair question coase after all had set out a conceptual approach to the study of externalities and transaction costs that has become an implicit part of the methodological baggage carried around by policy economists and policy makers alike buchanan was in part responsible for the welcome emphasis on institutions in public sector decision making and for insisting that politicians bureaucrats and voters are human beings with human motives the legacy of mirrlees and vickrey is less well known but i would argue it is every bit as profound their approach to the theory of economic policy which is grounded on the importance of imperfect information as a constraint on public policy has changed the very nature of public economics research and of its implications for economic

the effect of recipient contribution requirements on support for social programs abstract a large literature examines the use of recipient contribution requirements in social programs to target people who most need and value aid yet little is known about public support for such requirements in a field experiment with a nationally representative sample we examine the effect of recipient contributions on charitable donations to a food aid program the response to recipient monetary contributions is non monotonic donations increase when recipients make small monetary contributions and return to baseline under large recipient contributions recipient time contribution requirements also increase program support results from additional treatments suggest that individuals use contribution requirements to increase both allocative efficiency screening recipients who most value the good and targeting efficiency screening recipients most in need our work informs the design of social programs which must respond to the preferences of voters and donors who provide political and financial support

assessing the incidence and efficiency of a prominent place based policy abstract this paper empirically assesses the incidence and efficiency of round i of the federal urban empowerment zone ez program using confidential microdata from the decennial census and the longitudinal business database using rejected and future applicants to the ez program as controls we find that ez designation substantially increased employment in zone neighborhoods and generated wage increases for local workers without corresponding increases in population or the local cost of living the results suggest the efficiency costs of first round ezs were relatively modest jel h26 h77 j31 r23 r58

can public works increase equilibrium wages evidence from india s national rural employment guarantee abstract we estimate the impact of the world s largest public works program india s national rural employment guarantee scheme nregs on agricultural wages nregs was rolled out across india in three distinct phases and this phased introduction is used to identify difference in difference estimates of the program effect using monthly data on wage rates from the period 2000 2011 in 209 districts across 18 indian states we include district specific fixed effects and trends to control for differences in wage rates in the absence of the program we find that on average the program boosted the growth rate of real daily agricultural wages by 4 3 per year the effect of the scheme is more consistent with an increase in the growth rate of wages than with a discontinuous jump in wages the effect was concentrated in some states and in the agricultural peak season appears to have been gender neutral and was biased towards unskilled labor since many of the world s poorest depend on casual agricultural labor for their livelihood while at the same time minimum wage legislation is unlikely to be effective in many developing countries we argue that rural public employment programs constitute a potentially important anti poverty policy tool

cost minimizing welfare programs abstract we study opportunities for lowering the cost of welfare programs by exploiting heterogeneity in the unobservable tastes of welfare recipients relying on the inability of cash based programs to achieve self selection we provide circumstances in which it is optimal to provide payments in kind our model differs from other self selection models because we allow the recipients the opportunity to trade the subsequent to the receipt of their welfare packages the presence of unreported cash among the recipient population is considered

the paper work of medicine understanding international medical costs this paper draws on international evidence on medical spending to examine what the united states can learn about making its healthcare system more efficient we focus primarily on understanding contemporaneous differences in the level of spending generally from the 2000s medical spending differs across countries either because the price of services differs for example a coronary bypass surgery operation may cost more in the united states than in other countries or because people receive more services in some countries than in others for example more bypass surgery operations within the price category there are two further issues whether factors earn different returns across countries and whether more clinical or administrative personnel are required to deliver the same care in different countries we first present the results of a decomposition of healthcare spending along these lines in the united states and in canada we then delve into each component in more detail administrative costs factor prices and the provision of care received bringing in a broader range of international evidence when possible finally we touch upon the organization of primary and chronic disease care and discuss possible gains in that area

the deadweight loss of christmas when economists comment on holiday gift giving it is usually to condone the healthy effect of spending on the macroeconomy however an important feature of gift giving is that consumption choices are made by someone other than the final consumer a potentially important microeconomic aspect of gift giving is that gifts may be mismatched with the recipients preferences in the standard microeconomic framework of consumer choice the best a gift giver can do with say 10 is to duplicate the choice that the recipient would have made while it is possible for a giver to choose a gift which the recipient ultimately values above its price for example if the recipient is not perfectly informed it is more likely that the gift will leave the recipient worse off than if she had made her own consumption choice with an equal amount of cash in short gift giving is a potential source of deadweight loss this paper gives estimates of the deadweight loss of holiday gift giving based on surveys given to yale undergraduates i find that holiday gift giving destroys between 10 percent and a third of the value of gifts while these recipients may be unrepresentative of the u s population their gifts are not necessarily unrepresentative holiday expenditures average 40 billion per year implying that a conservative estimate of the deadweight loss of christmas is a tenth as large as estimates of the deadweight loss of income taxation i also explore how deadweight loss and the tendency to give cash gifts vary with the relationship and age difference between giver and recipient i find that gifts from friends and significant others are most efficient while noncash gifts from members of the extended family are least efficient and destroy a third of their value i develop a simple expected utility model to explain the decision to give cash as opposed to in kind gifts the data are consistent with the model cash gifts are most common from the sorts of givers whose noncash gifts have the lowest expected value to recipients given their cost and high variability in recipient valuation

a positive theory of in kind transfers and the negative income tax normative arguments for restricting redistribution to cash transfers or a negative income tax have not appealed to politicians or their constituents all modern governments redistribute income in kind and provide goods and services that can be produced and distributed privately at times public and private supply coexist housing services medical care and education are examples but so too are safety and many regulatory activities of government

repeated interaction and the public provision of private goods the literature suggests that governments can use in kind transfers to design efficient and targeted redistribution schemes if individual incomes are not directly observable we investigate the extent to which the self selection property of in kind transfers carries through if redistributive transfers are made repeatedly in a two period setting the government may gain information about the individuals incomes in the first period and exploit this information for making targeted transfers in the second period this however also triggers changes in the individuals behavior if the government can commit to its future policy the least cost policy may involve randomization between cash and in kind transfers without commitment the dynamic setting works against the government s interest it may no longer be able to use in kind transfers to generate information about the individuals types jel classification h42 h2

imperfect tagging in social insurance programs abstract this paper derives the optimal benefit structure of an earnings insurance program when a characteristic or tag imperfectly identifies those unable to work with a two sided classification error the optimal program is a dual work incentive system with a work non work consumption differential maintained for the tagged and untagged just sufficient to induce the able in each group to work and with more generous payments to tagged than to untagged individuals of the same work status it includes premiums to program eligible individuals who work a price missing in the u s social security disability system and in earlier attempts to characterize the optimal disability program

the regional distribution of public employment theory and evidence abstractthe regional distribution of public employment theory and evidence regional studies this article analyzes the optimal regional pattern of public employment in an information constrained second best redistribution policy it shows that regionally differentiated public employment can serve as an expenditure side tagging device bypassing or relaxing the equity efficiency trade off the optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality empirically using a panel of european regions from 1995 to 2007 the analysis finds evidence that public employment is systematically higher in low productivity regions the latter effect is stronger in countries with higher levels of regional inequality

consumption and poverty how effective are in kind transfers the ability of in kind transfers to alleviate poverty depends on accurate targeting as well as recipients valuations of the benefits using data from the consumer expenditure surveys the efficiency of in kind transfers is examined in a microsimulation framework in which recipients are identified as those who have the lowest consumption in this framework in kind transfers of food capital services which includes housing and consumer services are an effective means of providing support to the poor even at high levels of subsidization the multiple good transfers that are considered are essentially equivalent to cash grants copyright 1996 by royal economic society

estimating overall returns to international agricultural research in africa through benefit cost analysis a best evidence approach this study offers a best evidence approach to summarizing recent benefit cost analyses of international agricultural research in africa first from an extensive literature review and the resulting global inventory of impact studies 23 studies are identified that calculate aggregate rates of return for consultative group on international agricultural research cgiar and partner investments in sub saharan africa ssa these studies are then appraised against a review framework consisting of principles criteria and indicators for study rigor subsequently the economic benefits reported by studies grouped on the basis of its analytical rigor are aggregated and set against total investment by the cgiar and national agricultural research systems to determine if the total investment to date can be justified by documented benefits under a range of assumptions as a result the study finds that aggregate investment is justified under a fairly wide range of suppositions under all scenarios the vast majority of documented benefits stem from a relatively limited array of activities with a majority of benefits stemming from biological control 80 close to 20 of total benefits result from crop genetic improvement and less than 1 result from all other activities the implications of these results for research investment strategies in ssa and impact assessment are discussed

rents from in kind subsidy charity in the public sector public choice analysis usually focuses attention on the behaviour of self interested individuals but this paper considers rent seeking when some taxpayers are motivated by altruism redistribution policies initiated by self interested rent seekers require taxpayer approval even if taxpayers are fully informed their resistance to inefficient schemes is reduced when public sector schemes are the only means available to pursue altruistic goals altruism serves to broaden the scope within which rent seekers may operate a discussion of international tied aid illustrates the impact which rent seeking can exert on public sector charity