toward the diffusion of rural energy technologies some lessons from the indian biogas program abstract india has committed substantial resources to construct several hundred thousand biogas plants this program is reviewed within the context of the current status of biogas systems including technical economic manpower and training and organizational issues experience with a dozen village scale systems is analyzed in detail problems with the indian biogas program show the importance of basing technology diffusion efforts on an intimate understanding of rural resource flows and the local political economy the biogas experience illustrates a broader problem in development an imbalance between technology focused and people focused development assistance some of the causes and implications of this imbalance are discussed and some suggestions are offered to help both developing countries and various donors increase the effectiveness of development efforts by stimulating the growth of local organizations

re examination of uniform commodity taxes under a non linear income tax system and its implication for production efficiency abstract this paper shows that the result of uniform commodity tax under nonlinear income taxation by atkinson and stiglitz 1976 no longer holds if the production side of an economy is taken into the consideration in particular imposing a non uniform commodity tax can pareto improve welfare even under nonlinear income taxation in addition the paper shows that if the government uses a nonlinear income tax system for income redistribution then the introduction of distortions in the public sector can pareto improve welfare contrary to the results in diamond and mirrlees 1971

bond ladders and rolling yield convergence most investment grade bond portfolios have stable durations and can be regarded as duration targeted dt for dt portfolios multiyear returns converge to the starting rolling yield if the yield curve undergoes a sequence of strictly parallel shifts the theoretical convergence horizon is one year less than twice the duration target the laddered portfolios favored by private investors are essentially dt and surprisingly their convergence return coincides with the starting yield of the ladder s top rung bond

the ramsey problem for congestible facilities abstract in recent years a new set of models drawing on vickrey 1969 has been developed to analyze the economics of congestible facilities these models are structural in that they derive the cost function from consumers time of use decisions and the congestion technology standard models in contrast simply assume the general form of the cost function we apply the new approach to analyze the ramsey problem for a congestible facility and show that the solution generally entails cost inefficiency standard models have failed to reveal this result because they treat the cost function as completely determined by technology

diffusion of renewable energy technologies in developing countries a case study of biogas engines in india abstract this paper presents a case study of promoting biogas engines in india using an analytic framework involving i characteristics of the technology ii characteristics of the users iii macro environment iv role of government and other organizations and v structure of the market the case study shows that although the technology was economic from the viewpoint of society it was not adopted by the farmers on a large scale due to the unfavorable macro environment created by the government and because of an inappropriate pricing policy by the manufacturer

positive and normative judgments implicit in u s tax policy and the costs of unequal growth and recessions calculating the welfare implications of changes to economic policy or shocks requires economists to decide on a normative criterion one approach is to elicit the relevant moral criteria from real world policy choices converting a normative decision into a positive inference as in the recent surge of inverse optimum research we find that capitalizing on the potential of this approach is not as straightforward as we might hope we perform the inverse optimum inference on u s tax policy from 1979 through 2010 and argue that the results either undermine the normative relevance of the approach or challenge conventional assumptions upon which economists routinely rely when performing welfare evaluations

diffusion of rural innovations some analytical issues and the case of wood burning stoves abstract the literature on the diffusion of rural innovations in third world countries reveals a spectrum of approaches to the diffusion process it is argued here that the effectiveness of a particular approach in the diffusion of particular innovations would depend on the technical the economic and the social characteristics of the innovations a typology of innovations in terms of these characteristics has been drawn up this provides the analytical framework within which the instance of wood burning stoves is concerned a priori the characteristics of this innovation are seen to be such as to necessitate the close involvement of the users in the design process itself they point to the likely inappropriateness of the usual top down approach to diffusion available evidence relating to actual experience with promoting wood burning stoves is seen to bear this out

income maintenance and labor force participation the paper studies the optimal tax subsidy schedules in an economy where the only decision of the agents is to work or not with an application to the case of france given an income guarantee provided by the welfare state the tax schedule that maximizes government revenue provides a benchmark the laffer bound above which it is inefficient to tax in fact under mild conditions a feasible allocation is second best optimal if and only if the associated taxes are lower than the laffer bound the only restriction that efficiency puts on the shape of the tax scheme is this upper laffer bound the laffer tax scheme itself can be computed from the joint distribution of the agents productivities and work opportunity costs depending on the economy it can take widely different forms and exhibit for instance negative marginal tax rates after estimating the joint distribution of productivities and work opportunity costs on french data i compute the laffer bound for two subpopulations single women and married women with two children or more quite surprisingly the actual incentives to work appear to be very close to the bound

pareto efficient income taxation with stochastic abilities abstract this paper studies pareto efficient income taxation in an economy with finitely lived individuals whose income generating abilities evolve according to a two state markov process the study yields three main results first when individuals are risk neutral in any period the only individuals whose earnings are distorted are those who currently are and have always been low ability in addition the degree to which these perpetual low ability types have their earnings distorted decreases over time converging to zero if the time horizon is long enough second the earnings distortions are continuous with respect to the degree of risk aversion at the risk neutral solution third pareto efficient income tax systems can be time consistent even when the degree of correlation in ability types is large the condition for time consistency suggests a novel theoretical reason why the classic equity efficiency trade off may be steeper in a dynamic environment than previously thought

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

long term bond returns under duration targeting although most bond portfolios maintain a relatively stable duration over time and are thus implicitly or explicitly duration targeted the distinctive nature of duration targeting dt is underappreciated the authors theoretical dt model demonstrates that over multi year horizons annualized dt returns converge back to the starting yield regardless of the rate path for example for almost all six year holding periods since 1985 barclays bond index returns have converged to within 1 of the starting yield

education policies and taxation without commitment we study the implications of limited commitment on education and tax policies set by benevolent governments consistent with real world practices a government can decide to subsidize different levels of education at different rates a lack of commitment however affects the optimal structure of education subsidies the direction of the effect depends on how labor taxes are designed with linear labor tax rates and a transfer for redistribution subsidies become more progressive by contrast if the government is only constrained by informational asymmetries when designing taxes subsidies become more regressive

technical change wage inequality and taxes this paper considers the normative implications of technical change for tax policy design a task to talent assignment model of the labor market is embedded into an optimal tax problem technical change modifies equilibrium wage growth across talents and the substitutability of talents across tasks the overall optimal policy response is to reduce marginal income taxes on low to middle incomes while raising those on middle to high incomes the reform favors those in the middle of the income distribution reducing their average taxes while lowering transfers to those at the bottom jel d31 h21 h23 h24 j31 o33

self selection and pareto efficient taxation abstract this paper analyses the set of pareto efficient tax structures the formulation of the problem as one of self selection not only shows more clearly the similarity between this problem and a number of other problems such as the optimal pricing of a monopolist which have recently been the subject of extensive research but also allows the derivation of a number of new results we establish i under fairly weak conditions randomization of tax structures is desirable ii if different individuals are not perfect substitutes for one another in production then the general equilibrium effects until now largely ignored in the literature of changes in the tax structure may be dominant in determining the optimal tax structure in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor the optimal tax structure entails a negative marginal tax rate on the high ability individuals and a positive marginal tax rate on the low ability individuals the marnitude of which depends on the elasticity of substitution iii if individuals differ in their preferences pareto efficient taxation may entail negative marginal tax rates for high incomes while iv if wage income is stochastic the marginal tax rate at the upper end may be 100 our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic

sources of innovation in agricultural technology abstract this paper focuses attention on environmental and biological characteristics of agriculture which shape the process of technical innovation the interaction of natural selection and human purposive selection and experimentation is shown to result in a continuous process of innovation placing farmers in the informal r and d systems as well as scientists in formal r and d systems in an innovative treadmill the importance and limitations of informal r and d are reviewed a discussion of the characteristics and potential of formal r and d systems leads to the identification of some major problems of policy inherent in and specific to the organization and management of agricultural research resources these include genetic vulnerability choices between environmentally specific or widely adapted technologies the location of research activity the linkages between agricultural producers and scientists and methods for maintaining and strengthening informal r and d systems

optimal linear income taxation with general equilibrium effects on wages abstract the paper argues that the endogeneity of wages may make a considerable difference to optimal linear tax rates in this case there is not only the usual direct redistribution via the fiscal system but also the general equilibrium redistribution due to the change in wages depending on the elasticity of substitution of the production function and the labour supply elasticities these may be reinforcing or opposing it is shown that the general equilibrium effect may plausibly outweigh the direct effect so that net redistribution to the lower paid involves a wage subsidy financed by a lump sum tax

why have improved cook stove initiatives in india failed summary an estimated 2 7 billion people cook meals on biomass fueled brick stone and clay stoves scarcity of wood and negative impacts on health and environment have motivated efforts to design and distribute improved cook stoves in developing countries in india adoption is limited despite massive promotion over many decades existing research suggests that many rural women in india do not want improved stoves and those who do face obstacles to adoption we step back from the many good case studies to examine the broader story of improved cook stoves ics in india we do so by bringing together technical research of applied science and narrative critique of social science rather than assuming a priori that traditional stoves require replacement we ask why indian cook stoves been a magnet for so much attention why adoptions rates have remained low and what lessons might be learned from a broad multi disciplinary perspective our approach is critical and reflexive given our own involvement in ic efforts and puts gender at the center our big picture review shows that the indian chulha for all its problems is a remarkably successful technology which also satisfies several important household needs hence targeting this device for obsolescence has profound implications that cannot be reduced to energy consumption or environmental hazards rural women do not prioritize ics but addressing their priorities requires either capital intensive investment or challenging powerful institutions in contrast ic interventions are relatively cheap decentralized mechanical and seemingly apolitical hence their popularity in development programs our review of chulha research leads us to reject both the optimism of development planners who frame such problems as technical and the antagonistic pessimism of their critics searching for a middle ground requires stepping back from the dogma of efforts to improve biomass cook stoves

review of barriers to the dissemination of decentralized renewable energy systems abstract this paper reviews the available literature dealing with the barriers to the dissemination of decentralized renewable energy systems decentralized renewable energy systems may face a range of technical economic institutional socio cultural and environmental barrier to their dissemination in the paper barriers impeding the dissemination of decentralized renewable energy systems have been identified and assessed in addition appropriate remedial measures and corresponding responsibility centers as reported in the literature have also been discussed inappropriateness of technology unavailability of skilled manpower for maintenance unavailability of spare parts high cost lack of access to credit poor purchasing power and other spending priorities unfair energy pricing lack of information or awareness and lack of adequate training on operation and maintenance of decentralized renewable energy systems are found to be the most critical barriers long term conducive policies appropriate regulatory framework financial incentives capital subsidies and soft loans to users technology and skill development internalization of externalities in the cost of energy withdrawal of subsidies presently being given to fossil fuels development of specialized institutions cooperation with international agencies participation of local community and awareness generation have been recommended for increased dissemination of decentralized renewable energy systems

privatization and the distribution of income in the commons abstract the explicit treatment of heterogeneity among the users of the commons leads to results that differ from those that are now generally accepted in the literature the owner of the fixed factor is not able to expropriate the rents of privatization rather the resulting distribution of income to the free factor after privatization depends on the technology and the institutional arrangements this result extends to more than two goods if the decline in the price of the good produced in the commons is sufficient to offset the decline in the marginal product of labor in the rest of the economy

a reduced form optimal nonlinear income tax problem abstract for a finite population with quasilinear preferences it is shown how mirrlees optimal nonlinear income tax problem can be simplified to a reduced form problem involving only the allocation of the consumption good this result is a finite version of a proposition established in the continuum by s lollivier and j c rochet

roles and potentials of renewable energy in less developed economies the case of nepal increasing the share of renewable energy in the national energy mix remains one of the major energy policy goals across many economies this paper assesses the roles and potentials of renewable energy sources in less developed economies while citing nepal as an example renewable energy has a significant role to play in the electrification of rural areas in developing economies and contribute towards sustainable development realizing full potentials of renewable however requires addressing both the associated demand side and supply side constraints innovative subsidies and tax incentives adequate entrepreneurial support strengthening institutional arrangement and promoting local community based organizations such as the cooperatives are the necessary factors in promoting the green technologies in countries like nepal international factors such as large scale investment and adequate technology transfer are equally crucial to create a rapid spread and increase affordability of decentralized renewable energy technologies in less developed economies

learning to lend for off grid solar power policy lessons from world bank loans to india indonesia and sri lanka abstract the world bank has sought to advance the diffusion of solar photovoltaic pv technology for off grid applications in the developing world as these systems are fundamentally different to centralised power stations and conventional rural electrification the world bank has been learning how best to lend for such technology this study seeks to highlight the lessons learnt from the world bank s first loans for off grid pv to india indonesia and sri lanka it uses lifetime cost analysis to justify continued intervention in this sector and it draws on theories of innovation diffusion to guide analysis and ultimately policy recommendations because of the special role of entrepreneurial start up companies in the rural pv sector the paper also uses a company cash flow model to demonstrate the efficacy of various supply side policies finally the study concludes with a checklist of policy lessons and a consideration of the role of the international finance corporation in this sector

technological innovation and dispersion environmental benefits and the adoption of improved biomass cookstoves in tigrai northern ethiopia this paper empirically analyzes adoption and fuel savings efficiency of improved biomass cookstove technology using survey data from a cross section of 200 farm households from the highlands of tigrai northern ethiopia results indicate that these farm households are willing to adopt improved biomass cookstove innovations if this leads to economic savings moreover results suggest significant positive environmental externalities on a per household basis we found that adopters collect about 70 kg less wood and about 20 kg less dung each month the adoption of improved biomass cookstoves reduces harvest pressure on local forest stands assuming an average of 120 metric tons of biomass per ha we find the potential reduction in deforestation amounts to some 1400 ha per year an important saving further the reduced use of dung as a fuel has a positive impact on soil productivity in agriculture

duration targeting and the management of multiperiod returns modern portfolio management increasingly includes the use of targeted duration strategies as a means of achieving a desired balance between risk and return in such strategies a constant duration is maintained through periodic rebalancing one of the most important characteristics of duration targeting strategies is the focusing of the return distribution on a minimum variance point this point occurs when the duration is equal to about one half the investment horizon it is consequently possible to achieve partial immunization of a bond portfolio by simply maintaining its duration at one half the length of the investment horizon many performance benchmarks including the salomon brothers big index exhibit an almost constant duration it follows that by tracking a bond index one can obtain many of the results of a duration targeting strategy

decentralized fiscal federalism revisited optimal income taxation and public goods under horizontal leadership this paper concerns optimal taxation and public goods in an economic federation with decentralized leadership where one lower level government is the first mover also in the horizontal dimension under plausible assumptions horizontal leadership reinforces the incentives created by decentralized leadership

optimum taxation with errors in administration abstract the paper compares the welfare levels which can be achieved by two distinct tax regimes lump sum taxation where one attempts to identify individuals and allocate transfers or subsidies on the basis of characteristics and income taxation where characteristics are not observed but personal incomes are measured and taxed where there are no errors in classifying individuals lump sum taxation is superior but where mistakes are made in the allocation of lump sum grants or subsidies income taxation may be more attractive the level of errors where the regimes are equally desirable in terms of social welfare is computed in simple models following that of feldstein 1973 where there is strong aversion to inequality then income taxation becomes preferable at quite small errors in analysing income taxation it is shown that in the feldstein model with endogenous wages the marginal tax rate in optimum income taxation on the more skilled is negative and that on the less skilled is positive in contrast to the standard results see seade 1977 with exogenous wages