a public choice perspective of imf and world bank lending and conditionality the paper explains imf and world banklending and conditionality stressingchanges in relative bargaining power ofdifferent stakeholders over time itapplies public choice theory to explain theinterests of the institutions memberstates its borrowers and staffs as well asprivate actors attaching their money to theifis programs using panel data for 43countries between 1987 99 it is shown thatthe number of fund conditions seems to beinfluenced by contemporaneous world bankactivity and bad policies

the political economy of bilateral bailouts imf loans during times of financial crisis often occur in conjunction with bilateral financial rescues these bilateral bailouts are substantial in size and a central component of international cooperation during financial crises we analyze the political economy of bilateral bailouts and study the trade offs that potential creditor governments experience when other countries find themselves in financial distress creditor governments want to stabilize crisis countries by providing additional liquidity particularly if the crisis country is economically or politically important to them but they are constrained by domestic politics politicians aim to balance these countervailing pressures they provide bailouts when their own economy is exposed to negative spillover effects and when the crisis country is important for geostrategic military or political reasons domestic economic and political constraints on the other hand limit their ability to bail out other countries we test our hypotheses using an original data set on bilateral bailouts by the g7 countries to countries that experienced financial crises between 1975 and 2010 the findings of our statistical analysis support our theoretical argument and contribute to a deeper understanding of international cooperation s complex structure during financial crises

preferential trading arrangements as strategic positioning abstract we analyze a three country model of trade negotiations in which countries can form bilateral free trade areas bilateral customs unions or a trilateral preferential trading arrangement and can continue negotiating after reaching an agreement in contrast to the literature on multilateral bargaining the set of agreements can form a nonpartitional network while in contrast to the network literature players can reach multilateral agreements patient enough countries only reach bilateral agreements if insiders gain more than outsiders which allows them to manipulate the status quo in subsequent negotiations however a hub and spoke pattern may then emerge and insiders then dissipate the advantages of strategic positioning we also use variants on the model to explain why a us commitment not to bargain bilaterally sustained progress at gatt negotiations and the rarity of open access preferential trading arrangements

evolution of the economics of agricultural policy agricultural economists helped develop farm programs to respond to the dire economic situation of the 1920s and 1930s some early authors appreciated that such policies created problems in markets for commodities and inputs over time our understanding of agricultural issues and policies has deepened through the application of improved models and tools of analysis to more extensive data we have developed better answers to old questions and have responded to changing policy instruments market contexts and policy concerns this article traces the evolution of our deepening economic understanding of the causes and consequences of agricultural policy

global growth and international cooperation a structuralist perspective this paper revisits the structuralist ideas on trade and growth and suggests based on the prebisch s principle of implicit reciprocity that policies for promoting structural change in the periphery may lead to higher global growth and a better income distribution across countries the paper discusses the inter relations and complementarities that exist between autonomous expenditure and industrial and technology policies in the long run with this objective we develop a structuralist growth model in which the technology gap and the growth rate of the domestic autonomous expenditure are endogenously determined in a two country centre and periphery international economy copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

political economy of u s sugar policies this article examines political economic decision making with respect to u s sugar policies it evaluates the responsiveness of target prices and import quotas levels to changes in a the economic surpluses of market participants and b the federal budget deficit results indicate a weak linkage between sugar producer surplus and subsequent target prices levels but a strong linkage between the federal budget deficit and subsequent import quota levels the influences of sugar users corn sweetener producers and foreign countries are also examined

game theory and climate diplomacy abstract starting with the new periodic table npt of 2 2 order games introduced by robinson and goforth 2005 we provide an exhaustive treatment of the possible game theoretic characterizations of climate negotiations between two players e g great powers or coalitions of states of the 144 distinct 2 2 games in which the players have strict ordinally ranked utilities 25 are potentially relevant to climate problem the negotiations may be characterized as a no conflict game prisoner s dilemma coordination game chicken type game or cycle depending on the payoff matrix which game corresponds to the actual state of the world depends both on the severity of risks associated with climate change and the perceptions of the governments engaged in the negotiations nash equilibrium or maxi min equilibrium or neither may be the outcome achieving universal abatement of greenhouse gas emissions may require side payments or enforcement mechanisms outside the game framework but we show how the negotiations themselves may offer opportunities to select between nash equilibria or alter the payoff rankings and strategic choices of the players in particular scientific information pointing to the severity of the risks of climate change suggests characterization of the negotiations as a coordination game rather than a prisoner s dilemma

groundnut trade liberalization could the south help the south summary this paper analyzes policies affecting global groundnut products markets the new us groundnut policy is now a minor source of distortion in world markets where india and china stand out as the major distorters we analyze and quantify the effects of groundnut products trade liberalization on consumer welfare and producer income our analysis shows that african exporters would gain significantly from reductions in protection and subsidies in india and to a lesser extent china although china s exports of food quality groundnuts would expand dramatically net importing oecd countries would suffer from higher world prices the paper draws direct implications for the doha trade negotiations

a probabilistic choice model for market segmentation and elasticity structure marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching though the approach is useful it typically ignores the destabilizing

towards a more ethically correct governance for economic sustainability in this paper we propose that economic sustainability is seen in terms of inter temporal and inter national value creation we claim that value appropriation or capture can become a constraint to economic sustainability we propose that for sustainable value creation to be fostered corporate governance needs to be aligned to public and supra national governance in order to achieve this a hierarchically layered set of agencies needs to be diagnosed and the issue of incentive alignment addressed enlightened self interest pluralism and diversity as well as a representative supra national organisation for world wide economic sustainability can serve as a new more ethically correct governance for economic sustainability but not a panacea

sovereign debt relief and its aftermath this paper studies sovereign debt relief in a long term perspective we quantify the relief achieved through default and restructuring in two distinct samples 1920 1939 focusing on the defaults on official government to government debt in advanced economies after world war i and 1978 2010 focusing on emerging market debt crises with private external creditors debt relief was substantial in both eras averaging 21 of gdp in the 1930s and 16 of gdp in recent decades we then analyze the aftermath of debt relief and conduct a difference in differences analysis around the synchronous war debt defaults of 1934 and the baker and brady initiatives of the 1980s 1990s the economic landscape of debtor countries improves signicantly after debt relief operations but only if these involve debt write offs softer forms of debt relief such as maturity extensions and interest rate reductions are not generally followed by higher economic growth or improved credit ratings jel e6 f3 n0 and h6

the imf as a biased global insurance mechanism asymmetrical moral hazard reserve accumulation and financial crises a large literature has established that the international monetary fund imf is heavily politicized we argue that this politicization has important consequences for international reserve accumulation and financial crises the imf generates moral hazard asymmetrically reducing the expected costs of risky lending and policies for states that are politically influential vis a vis the institution using a panel data set covering 1980 to 2010 we show that proxies for political influence over the imf are associated with outcomes indicative of moral hazard lower international reserves and more frequent financial crises we support our causal claims by applying the synthetic control method to taiwan which was expelled from the imf in 1980 consistent with our predictions taiwan s expulsion led to a sharp increase in precautionary international reserves and exceptionally conservative financial policies

marketing quotas and random yields marginal effects of inframarginal subsidies on peanut supply the u s peanut program restricts domestic sales with poundage quota but allows surplus production to be exported or crushed empirical analysis of north carolina peanut production reveals that the marginal and lower price received by production above quota that is the world price is far more important in determining acreage than is the inframarginal subsidy of the quota support price

debt relief and debtor outcomes measuring the effects of consumer bankruptcy protection consumer bankruptcy is one of the largest social insurance programs in the united states but little is known about its impact on debtors we use 500 000 bankruptcy filings matched to administrative tax and foreclosure data to estimate the impact of chapter 13 bankruptcy protection on subsequent outcomes exploiting the random assignment of bankruptcy filings to judges we find that chapter 13 protection increases annual earnings by 5 562 decreases five year mortality by 1 2 percentage points and decreases five year foreclosure rates by 19 1 percentage points these results come primarily from the deterioration of outcomes among dismissed filers not gains by granted filers jel d14 i12 j22 j31 k35

the scope of imf conditionality international organizations are governed by two parallel sets of rules formal rules which embody consensual procedures and informal rules which allow exceptional access for powerful countries a new data set drawn from the imf s records of conditionality provides an opportunity to study the bargaining process within an important international organization and answer questions about the institution s autonomy i find evidence of u s influence which operates to constrain condition ality but only in important countries that are vulnerable enough to be willing to draw on their influence with the united states in ordinary countries under ordinary circumstances broad authority is delegated to the imf which adjusts conditionality to accommodate local circumstances and domestic political opposition the imf has refrained from exploiting the vulnerability of particular countries to maximize the scope of conditionality international organizations have become increasingly important actors in inter national politics they have proliferated have expanded in membership have acquired new legal enforcement powers and have extended their reach into the details of domestic political economy in their member states af ew including the international monetary fund imf or simply the fund command significant resources and wield considerable authority some critics have argued that these international organizations are sufficiently autonomous to create a democratic def icit at the international level as they pursue a vision of undemocratic liberal ism 1 other critics have argued that international organizations are nothing more than instruments in the hands of powerful states 2 these critiques of course cannot simultaneously be true and both run into difficulties the puzzle that the rogue agency view cannot explain is why the principals have chosen to delegate so much authority in principal agent terms this view posits that both screening and monitoring have failed the principals are unable to select agents with preferences similar to their own and are unable

retail price controls in the dairy industry a political coalition argument the purpose of this paper is to offer a rationale for dairy farmers support of retail price controls on bottled milk because of essentially fixed proportions in production it can be anticipated that the imposition of a binding minimum retail price constraint on bottled milk will have a negative impact on the derived demand for raw milk at the farm level yet dairy farmers in several states have sought to establish retail price controls on milk and have often resisted attempts to repeal controls in the states where they exist 1 the point that producers or manufacturers will support retail price controls is not new telser for example has offered a general explanation for support of fair trade laws 2 the analysis offered here however does not depend on his service enhancement argument rather my arguments are more in line with peltzman s view of vote maximizing regulators 3 peltzman has argued that vote maximizing legislators will not act as perfect brokers for a single interest group in his model however if opposition to a regulatory program can be reduced legislators will be more

a dynamic analysis of marketing orders voting and welfare this paper presents a dynamic model of how profit maximizing farmers would vote on marketing order rules given that new firms will enter based on rational expectations perfect foresight about the path profits follow early entrants make large short run gains while in the long run marginal firms break even welfare analyses under a dynamic model differ substantially from the static analyses normally reported an evaluation of the profit and welfate effects of marketing orders requires explicit recognition of the gains to be made during the transition from a competitive equilibrium to a regulated equilibrium this paper presents a dynamic model of how profit maximizing farmers would vote on marketing order rules given that new firms will enter based on rational expectations perfect foresight about the path profits follow most previous studies are static and have contrasted the competitive long run equilibrium with the regulated long run equilibrium virtually all of the studies on fruit and vegeta

technology choice under changing peanut policies the effect of marketing quotas and price supports on technology adoption are examined for peanut production in the southeastern united states using a real options model of investment with output price and yield uncertainty the optimal choice of peanut production technology dryland versus irrigated in the southeast is shown to depend on price supports and how they change the manner in which price supports change will have an effect on the choice and rates of abandonment or adoption of production technologies

consistent estimation of general equilibrium welfare effects a general equilibrium demand curve is appropriate for measuring the surplus changes in several markets induced by a policy intervention in one market guidelines for the identification and consistent estimation of such a demand curve are discussed specifically conditions are stated under which the dropping of prices of related goods yields a consistent estimate of the slope of the general equilibrium demand curve also a method similar to leamer s is proposed to provide consistent bounds for the general equilibrium demand slope when the slope is underidentified

acreage decisions under marketing quotas and yield uncertainty a conceptual model examines how quotas and yield uncertainty affect acreage decisions production in excess of a quota can occur if the price for quota production is large relative to marginal costs increasing risk aversion increases expected production further if the risk of forfeiting quota revenue is given greater weight than avoiding production risk allowing quota carryover decreases production levels simulations indicate the most important factors determining expected production levels are a the existence of a carryover provision b the price differential given to quota production relative to nonquota production and c the level of marginal costs relative to the quota price

research note a dynamic programming approach to customer relationship pricing the practice of offering discounts to prospective customers represents a rudimentary form of using transaction history measures to customize the marketing mix furthermore the proliferation of powerful customer relationship management crm systems is providing the data and the communications channels necessary to extend this type of pricing strategy into true dynamic marketing policies that adjust pricing as customer relationships evolve in this paper we describe a dynamic programming based approach to creating optimal relationship pricing policies the methodology has two main components the first component is a latent class logit model that is used to model customer buying behavior the second component is a dynamic optimization procedure that computes profit maximizing price paths the methodology is illustrated using subscriber data provided by a large metropolitan newspaper the empirical results provide support for the common managerial practice of offering discounts to new customers however in contrast to current practice the results suggest the use of a series of decreasing discounts based on the length of customer tenure rather than a single steep discount for first time purchasers the dynamic programming dp methodology also represents an important approach to calculating customer value cv specifically the dp framework allows the calculation of cv to be an explicit function of marketing policies and customer status as such this method for calculating cv accounts for the value of managerial flexibility and improves upon existing methods that do not model revenue and attrition rates as functions of marketing variables

the effect of imf programs on economic growth abstract using a bivariate dynamic version of the heckman selection model we estimate the effect of participation in international monetary fund imf programs on economic growth we find evidence that governments enter into agreements with the imf under the pressures of a foreign reserves crisis but they also bring in the fund to shield themselves from the political costs of adjustment policies program participation lowers growth rates for as long as countries remain under a program once countries leave the program they grow faster than if they had remained but not faster than they would have without participation

comparing features of convenient estimators for binary choice models with endogenous regressors abstract we discuss the relative advantages and disadvantages of four types of convenient estimators of binary choice models when regressors may be endogenous or mismeasured or when errors are likely to be heteroscedastic for example such models arise when treatment is not randomly assigned and outcomes are binary the estimators we compare are the two stage least squares linear probability model maximum likelihood estimation control function estimators and special regressor methods we specifically focus on models and associated estimators that are easy to implement also for calculating choice probabilities and regressor marginal effects we propose the average index function aif which unlike the average structural function asf is always easy to estimate

measuring the impact of promotions on brand switching when consumers are forward looking abstract logit choice models have been used extensively to study promotion response this article examines whether brand switching elasticities derived from these models are overestimated as a result of rational consumer adjustment of purchase timing to coincide with promotion schedules and whether a dynamic structural model can address this bias using simulated data the authors first show that if the structural model is correct brand switching elasticities are overestimated by stand alone logit models a nested logit model improves the estimates but not completely second the authors estimate the models on real data the results indicate that the structural model fits better and produces sensible coefficient estimates the authors then observe the same pattern in switching elasticities as they do in the simulation third the authors predict sales assuming a 50 increase in promotion frequency the reduced form models predict much higher sales levels than does the dynamic structural model the autho

international taxation the trajectory of an idea from lorimer to brandt abstract this paper examines early proposals for the establishment of international taxes for the support of international organization for the maintenance of international order and or for development the writings examined span close to one century starting with james lorimer in 1884 and concluding with the report of the brandt commission in 1980 our focus is on works mainly written since 1940 which explore the possibility of taxation levied by a global authority on income and transactions of individuals and firms rather than the financing of aid and international organization by national governments which is sometimes regarded as equivalent to taxation

the rational design of international institutions international institutions are central features of modern international relations this is true of trade international debt and financial restructuring and even national security once the exclusive realm of pure state action it was certainly true of the two major military engagements of the 1990s the wars in kosovo and the persian gulf as international institutions have gained prominence in the political landscape they have increasingly become prominent topics for study the sharpest debate among researchers has been theoretical do international institutions really matter missing from this debate is a sustained inquiry into how these institutions actually work we shift the focus by posing researchable questions about how they operate and how they relate to the problems states face we begin with a simple observation major institutions are organized in radically different ways some are global essentially open to all states others are regional with restricted memberships some institutions give each state an equal vote whereas others have weighted voting and sometimes require supermajorities institutions may have relatively strong central authorities and significant operating responsibilities or be little more than forums for consultation some arrangements for example most bilateral treaties have no formal organizational structure these are plentiful because states have a striking tendency to codify their relationships in formal legal arrangements why do these differences exist do they really matter both for members and for international politics more generally do they affect what the institutions themselves can do we focus on these large questions of institutional design

applied general equilibrium welfare analysis harberger has long advocated a particular technique for measuring the sum of all effects of an intervention both in the intervened in and related markets the technique is to calculate consumer and producer surplus changes behind demand and supply curves that are explicitly general equilibrium ge that is along curves that hold constant demand and supply conditions in related markets but not prices by calculating surplus changes with respect to such curves one simulates the equilibrium price paths in other markets resulting from the intervention and captures the sum of the welfare effects several authors have elaborated on harber

catalysing private capital flows do imf programmes work as commitment devices in this article we examine whether imf programmes influence the ability of developing country issuers to tap international bond markets and if they improve spreads paid on the bonds issued we find that fund programmes do not provide a uniformly favourable signalling effect instead the evidence is most consistent with a positive effect of imf programmes when they are viewed as likely to lead to policy reform and when undertaken before economic fundamentals have deteriorated significantly the size of the fund s programme matters but the credibility of a joint commitment by the country and the imf appears to be critical enhancing its members access to international capital markets is widely regarded as an important objective of the international monetary fund imf or fund though the objective is not an explicitly stated purpose in the fund s articles of agreements the flow of international capital is essential to such stated purposes as the stability of the international monetary system efficient trade and productive resource use and to providing confidence when a member country experiences difficulties with its balance of payments 1 the fund s interest in private international capital flows has moreover increased over the last decade reflecting this evolution the fund s former managing

individual team incentives and managing competitive balance in sports leagues an empirical analysis of major league baseball abstract major league baseball and other professional sports leagues have long been concerned with competitive imbalances caused by differences in local revenues the fear is that in the absence of salary caps or other regulatory mechanisms smaller market teams will be unable to remain competitive this research uses a structural dynamic programming model to analyze ownership s payroll investment decisions this model estimates the relationship between optimal payrolls and local market populations and the influence of long term customer equity dynamics on payroll investments in addition the author analyzes the impact of a recent policy intervention that implemented revenue transfers from high local revenue markets to low local revenue markets the statistical results indicate that market population has a significant impact on the value of a team s payroll investments for example optimal payrolls double as the population increases from 2 5 million to 7 5 million furthermore rather than improving com

preferences for international redistribution the divide over the eurozone bailouts why do voters agree to bear the costs of bailing out other countries despite the prominence of public opinion in the ongoing debate over the eurozone bailouts voters preferences on the topic are poorly understood we conduct the first systematic analysis of this issue using observational and experimental survey data from germany the country shouldering the largest share of the eu s financial rescue fund testing a range of theoretical explanations we find that individuals own economic standing has limited explanatory power in accounting for their position on the bailouts in contrast social dispositions such as altruism and cosmopolitanism robustly correlate with support for the bailouts the results indicate that the divide in public opinion over the bailouts does not reflect distributive lines separating domestic winners and losers instead the bailout debate is better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other regarding concerns

a public choice approach to international organization the purpose of this paper has been to develop a positive theory of international organization which can supplement the conventional normative theory used as a positive theory the conventional approach draws much of its plausibility from the fact that it relies on the reasons given by the decision makers and reported in the media and on the lofty objections stated in the charters of international agencies the public choice approach by its very nature is precluded from accepting such evidence in some respects it must appear dismal and perhaps cynical it is a positive theory which tries to explain but just as the conventional normative theory tends also to be used as a positive theory our positive theory is likely to have normative implications as well it does not imply that international organization is generally undesirable but it can be used to emphasize the advantages of decentralized policy making and to warn against a naive internationalism which welcomes international agreements for their own sake regardless of what is being agreed upon international organization can be and is abused and the cause is not an occasional lack of virtue among politicians but a systematic built in tendency toward collusion at the expense of the citizens such collusion is not only undesirable in itself there is also the danger that it discredits and crowds out unambiguously desirable forms of international cooperation agreements to remove non market obstacles to market interdependence in the field of international trade and capital movements

cross subsidization due to inframarginal support in agriculture a general theory and empirical evidence a general theory of cross subsidization due to inframarginal support is developed two sources of output distortion are identified exit deterrence and extramarginal output some firms would not be in business without the subsidy cost savings due to declining average costs are always greater than the losses incurred where price equals marginal cost moreover it is theoretically possible for inframarginal subsidies to expand output more than equivalent fully coupled subsidies empirical analysis of u s dairy subsidies isolates these components of cross subsidization and finds distortions from inframarginal support to be substantial with implications for trade negotiations dispute settlement and policy formulation copyright 2008 oxford university press

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

mailing decisions in the catalog sales industry catalog sales are among the fastest growing businesses in the u s the most important asset a company in this industry has is its list of customers called the house list building a house list is expensive since the response rate of names from rental lists is low cash management therefore plays a central role in this capital intensive business this paper studies optimal mailing policies in the catalog sales industry when there is limited access to capital we consider a stochastic environment given by the random responses of customers and a dynamic evolution of the house list given the size of real problems it is impossible to compute the optimal solutions we therefore develop a heuristic based on the optimal solutions of simplified versions of the problem the performance of this heuristic is evaluated by comparing its outcome with an upper bound derived for the original problem computational experiments show that it behaves satisfactorily the methodology presented permits the evaluation of potential catalog ventures thus proving useful to entrepreneurs in this industry

the political economy of imf lending in africa why has imf lending achieved such poor results in africa is it because the fund imposes the wrong conditions or because it fails to enforce them analysis of monthly data on 53 african countries from 1990 to 2000 shows that the imf s loans for reform contract lacks credibility because donor countries intervene to prevent rigorous enforcement countries that have influence with developed country patrons as measured by u s foreign aid membership in postcolonial international institutions and voting profiles in the un are subject to less rigorous enforcement shorter program suspensions they have more frequent program suspensions because they violate their conditions more often the imf will have to become more independent in order to become an effective champion of reform

money talks supplementary financiers and international monetary fund conditionality what explains the changes in international monetary fund imf conditionality i argue that imf conditionality agreements are influenced by supplementary financiers the imf regularly relies on external financing to supplement its loans to countries facing payments imbalances as a result these supplementary financiers are able to exercise leverage over the imf and the design of its conditionality programs i consider the influence of one type of supplementary financier private financial institutions on imf conditionality conclusions are supported by a data set of 249 conditionality arrangements coded according to their terms and two case studies

contracting problems and the adoption of regulatory cartels since 1966 a usd a marketing order has governed the sales volume of domestic hop growers despite offering cartel like advantages a hop marketing order proposal was defeated in a 1965 referendum of growers using individual grower votes from this referendum this paper identifies the sources of opposition to the 1965 marketing order the analysis proceeds to examine the types of recontracting that transpired enabling the adoption of a revised proposal in 1966

the high politics of imf lending analysts have long suspected that politics affects the lending patterns of the international monetary fund imf but none have adequately specified or systematically tested competing explanations this paper develops a political explanation of imf lending and tests it statistically on the developing countries between 1985 and 1994 it finds that political realignment toward the united states the largest power in the imf increases a country s probability of receiving an imf loan a country s static political alignment position has no significant impact during this period suggesting that these processes are best modeled dynamically an analysis of two subsamples rejects the hypothesis that the imf has become less politicized since the end of the cold war and suggests that the influence of politics has actually increased since 1990 the behavior of multilateral organizations is still driven by the political interests of their more powerful member states

production incentives from static decoupling land use exclusion restrictions many agricultural support payments are based on past production with restrictions on how land may currently be used when support payments to field crops are analyzed in a static framework they do not directly impact current production decisions however over time as relative profits change these payments affect current output the payments may keep land in less profitable production of program crops through restrictions prohibiting potentially more profitable endeavors such as cultivating fruits and vegetables these payments have the potential to lead to production and trade distortions similar in magnitude to the distortions associated with direct production subsidies

restricting the market for quota an analysis of tobacco production rights with corroboration from congressional testimony regulatory programs that restrict output levels often impose restrictions on the transfer of rights to produce or to use particular inputs in this paper we use a unique cross section time series data set from north carolina to quantify the welfare effects of transfer restrictions for poundage quota under the u s flue cured tobacco program we find that the deadweight costs of such restrictions are small but that the distributional effects are substantial we analyze congressional testimony on quota transfer legislation and conclude that our estimates of the distributional effects are consistent with expressed views of market participants

the fable of the bees revisited causes and consequences of the u s honey program abstract in his 1973 paper steven cheung discredited the fable of the bees by demonstrating that markets for beekeeping services exist and function well although economists heeded cheung s lessons policy makers did not the honey program has operated for over 50 years supporting the price of honey through a variety of mechanisms its effects were minor before the 1980s but then became important with annual government expenditures near 100 million for several years reforms of the program in the late 1980s reduced its market effects and budget costs returning it to its original role as a minor commodity program although the 1996 farm bill formally eliminated the honey program it was reinstated in the 2002 farm bill we measure the historical welfare effects of the program during its various incarnations examine its frequently stated public interest rationale the encouragement of honeybee pollination and interpret its history in light of economic theories of regulation

under what circumstances past and present have international rescues of countries in financial distress been successful recent events in asia and other parts of the globe have prompted calls from many quarters for international rescue of the monetary or fiscal authorities in distressed countries we contrast the experience of rescues of monetary authorities before 1973 of advanced countries temporarily short of liquidity with recent experience of bailouts international rescues in the past have involved relatively small amounts of money sufficient to stave off devaluation or abandonment of a fixed exchange rate while remedial policies were put in place recent bailouts have involved handing over relatively large amounts to both foreign lenders and domestic investors after devaluation of a pegged exchange rate to avoid their incurring wealth losses we document past rescues whether successful or unsuccessful by monetary regimes and show what is different today from past experience

the economic effects of supply controls the simple analytics of the u s peanut program a gricultural commodity programs employ a wide variety of policy tools to regulate u s agriculture price supports are the most common form of intervention but rights to sell at the supported price are allocated very differently under different commodity programs under recent feed grain programs for example the right to sell at the supported price is linked to acreage set asides agreements not to produce on certain acres in other programs sales by individual farmers are controlled under marketing orders sponsored by the u s department of agriculture usda 2 a third method is through permanent maketing quotas that directly limit output only two major commodity programs those for tobacco and peanuts currently allocate the right to sell in this way the peanut program is the subject of this article 3

international negotiations and domestic politics the case of imf labor market conditionality what is the role of international organizations ios in the formulation of domestic policy and how much influence do citizens have in countries negotia tions with ios we examine these questions through a study of labor related condi tionality in international monetary fund imf loans using new data from imf loan documents for programs from 1980 to 2000 we test to see if citizens economic interests influence imf conditionality we examine the substance of loan conditions and identify those that require liberalization in the country s domestic labor market or that have direct effects on employment wages and social benefits we find evi dence that democratic countries with stronger domestic labor receive less intrusive labor related conditions in their imf loan programs we argue that governments con cerned about workers opposition to labor related loan conditions negotiate with the imf to minimize labor conditionality we find that the imf is responsive to domes tic politics and citizens interests

dynamic allocation of pharmaceutical detailing and sampling for long term profitability the u s pharmaceutical industry spent upwards of 18 billion on marketing drugs in 2005 detailing and drug sampling activities accounted for the bulk of this spending to stay competitive pharmaceutical managers need to maximize the return on these marketing investments by determining which physicians to target as well as when and how to target them in this paper we present a two stage approach for dynamically allocating detailing and sampling activities across physicians to maximize long run profitability in the first stage we estimate a hierarchical bayesian nonhomogeneous hidden markov model to assess the short and long term effects of pharmaceutical marketing activities the model captures physicians heterogeneity and dynamics in prescription behavior in the second stage we formulate a partially observable markov decision process that integrates over the posterior distribution of the hidden markov model parameters to derive a dynamic marketing resource allocation policy across physicians we apply the proposed approach in the context of a new drug introduction by a major pharmaceutical firm we identify three prescription behavior states a high degree of physicians dynamics and substantial long term effects for detailing and sampling we find that detailing is most effective as an acquisition tool whereas sampling is most effective as a retention tool the optimization results suggest that the firm could increase its profits substantially while decreasing its marketing spending our suggested framework provides important implications for dynamically managing customers and maximizing long run profitability

room to move international financial markets and national welfare states a central research question in international political economy concerns the influence of financial markets on government policy outcomes to what extent does international capital mobility limit government policy choices i evaluate the relationship between international financial markets and government policy outcomes with a focus on the government bond market in developed democracies evidence includes interviews with financial market participants and a cross sectional time series analysis of the determinants of interest rates this evaluation suggests that governments of developed democracies face strong but narrowly defined financial market pressures financial market participants are concerned with a few macroeconomic policy indicators including inflation rates and government deficit gdp ratios but not with micropolicy indicators such as the distribution of government spending across functional categories in these areas governments retain policymaking autonomy i conclude by exploring the role of financial market influences within domestic politics and offering suggestions for further research

the impact of bad writing in economics we find significant style differences between articles written by economists for their professional journals and articles by the same economists in the wall street journal we find no evidence that style influences the professional success of economists which suggests that the private rewards to improving the quality of writing are low indeed each community of scholars has probably adopted a professionally correct writing style from which its members diverge little however scholars do alter their rhetorical style to communicate effectively with audiences other than the professional community this suggests that intra and inter group written communication by economists is efficient

the disadvantage of tying their hands on the political economy of policy commitments incumbents are more likely to be re elected if they have a comparative advantage in the eyes of voters on some central issue this paper argues that incumbents have an incentive to avoid reforms that reduce the government s role in deciding these issues in order to increase their chances of re election this point is illustrated in the context of the choice of an exchange rate regime in an economy characterized by an inflation bias a flexible exchange rate allows the government to use monetary policy as a stabilization tool while fixed exchange rates remove the inflation bias of the economy on the one hand it is shown that a more inflation averse government may refrain from choosing fixed exchange rates in order to capitalize on the inflationary reputation of its opponent this incentive is contrasted with the opposite incentive to tie the hands of the future government should be incumbent be defeated on the other hand it is shown that electoral considerations may reinforce the incentive of the more inflationary government to tie its own hands with fixed exchange rates

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

congressional politics of financing the international monetary fund we address the question of how international public goods are financed by analyzing voting in the u s congress on legislation to increase the u s contri bution to the international monetary fund imf we argue that legislators are more likely to vote in favor of an increase 1 the more campaign contributions they obtain from banks that specialize in international lending and 2 the greater the share of high skilled proglobalization workers in their districts the first argu ment supports the inference that a financially strong imf mitigates the risks of international lending to the benefit of the lending banks the second reflects our claim that voters view the imf as a positive force for global economic integration that following stolper samuelson reasoning benefits high skilled workers lastly we analyze imf loan decisions and find modest support for the claim that imf policy reflects the interests of major international banks overall our results sug gest that private actors within the united states have individual stakes in funding the imf the primary mandate of the international monetary fund imf or fund is to safeguard the stability of the global financial system an international public good the imf obtains the resources it needs for its stabilization operations from mem ber governments with large members contributing most of the funds in this arti cle we analyze the politics of funding the imf from the perspective of its largest contributor the united states rather than treating the united states as a single entity with a unified national interest at the fund we consider the preferences of political actors within the united states who exert power over financing the

modeling world peanut product markets a tool for agricultural trade policy analysis this paper presents a new partial equilibrium multi market international model developed to analyze policies affecting peanut products markets the model covers four goods food quality peanuts crush quality peanuts peanut oil and groundnut cake in 13 countries regions argentina canada china the eu 15 the gambia india malawi mexico nigeria senegal south africa the united states and rest of world welfare is evaluated by looking at consumers equivalent variation quasi profits in farming peanut farming livestock quasi profits in crushing and taxpayers revenues and outlays implied by distortions we calibrate the model for three recent years 1999 2000 2000 01 and 2001 02 on historical data we illustrate the model s applicability with a peanut trade liberalization scenario the impact of the reform scenario is measured in deviation from the historical baseline and by averaging the three estimates of annual impacts

independent actor or agent an empirical analysis of the impact of u s interests on international monetary fund conditions abstract in this paper we analyze whether international monetary fund imf conditionality is exclusively designed to be in line with observable economic indicators or whether it is partly driven by the imf s major shareholder the united states a panel data analysis of 206 letters of intent from 38 countries submitted during the period april 1997 through february 2003 revealed that the number of conditions on an imf loan depended on a borrowing country s voting pattern in the un general assembly closer allies of the united states and other group of 7 g7 countries received imf loans with fewer conditions especially prior to elections these results are relevant to current public policy debates on the role and process of setting imf loan conditions and provide broader insight into the influence of the united states and other g7 countries on international institutions

disentangling the consequences of direct payment schemes in agriculture on fixed costs exit decisions and output this paper goes beyond orthodox considerations of direct payment effects on agricultural output by highlighting the role of subsidies in affecting individual producers ability to cover fixed costs and in distorting the volume of aggregate production and net trade by implicitly discouraging exits the theoretical model considers both taxpayer and consumer financed decoupled direct payment schemes and compares them to a coupled production subsidy in terms of possible producer responses to direct payments the paper proposes an analytical framework of production decision making in the presence of a stochastic distribution of fixed costs across representative farms the paper shows that decoupled payments in theory can have a larger effect on output than coupled payments the model explicitly recognizes three consequences of domestic support a induce exit or entry b bias production incentives to domestic markets and c cross subsidize export in global markets an empirical model of the u s wheat sector is developed to illustrate the relative potential impacts of coupled versus decoupled payments on output through the effects on a farmer s ability to cover fixed costs and hence exit decisions

international cooperation during the covid 19 pandemic this paper explores the concept of global public goods gpgs in the context of the ongoing covid 19 pandemic it argues that many of the tasks involved in public health and in particular those involved in the control of an infectious disease like covid 19 ought to be treated as gpgs that can only be effectively delivered through international cooperation it sets out what a cooperative response to the covid 19 pandemic should look like and introduces ideas for further discussion about how it might be financed

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

global horse trading imf loans for votes in the united nations security council we investigate whether temporary members of the united nations security council receive favorable treatment from the international monetary fund imf using panel data for 197 countries over the period from 1951 to 2004 our results indicate a robust positive relationship between temporary security council membership and participation in imf programs even after accounting for economic political and country specific factors there is also evidence that security council membership reduces the number of conditions included in imf programs imf loans seem to be a mechanism by which the major shareholders of the fund can win favor with voting members of the security council

optimal mailing of catalogs a new methodology using estimable structural dynamic programming models we investigate the key determinants of the optimal direct mail policy in a dynamic environment where customers maximize utility and the direct mailer maximizes profits we measure the sensitivity of the customers to receiving a catalog in the mail while controlling for customer characteristics such as elapsed time in responses and number of purchases we apply our model to a database from a national cataloger that markets nonseasonal products we summarize the results of our model that are valid for these types of products we find that the dynamic model significantly outperforms its single period counterpart we find that it is not optimal to mail to individuals at low recency levels because they are likely to buy anyway it is better to save the mailing dollars for customers at higher recency levels we find that it is optimal to mail to customers who have purchased only a small or a medium number of times to induce them to continue to buy from this catalog and not switch to others it is not necessary to mail often to customers who have purchased many times before from the company unless they have high recency values we find that under the optimal mailing policy the cataloguer enjoys higher profits than under the current mailing policy

valuing customer portfolios with endogenous mass and direct marketing interventions using a stochastic dynamic programming decomposition the customer relationship management allocation in marketing budgets is potentially misleading when it uses individual customer lifetime value estimations from historical data planned marketing interventions would change the purchasing behavior of different customers and history based decisions would thus be suboptimal to cope with this inherent endogeneity we model the optimal allocation of the marketing mix by accounting simultaneously for mass interventions and direct marketing interventions for each customer this is a large stochastic dynamic problem that in general is computationally rather intractable as a result of the curse of dimensionality we present an algorithm to derive the optimal marketing policies how the firm should allocate its marketing resources and the expected present value of those decisions which maximize the long term profitability of firms this allows the firm to value customers segments and helps the firm to target those that maximize long term profitability given the optimal marketing resources allocation we apply the proposed approach in the context of a kitchen appliance manufacturer the results identify the most effective marketing policies and the endogenous customer values it is in this context that we also dynamically identify the most profitable customer and the short and long term effects of marketing activities on each customer

economic rents under supply controls with marketable quota we analyze the distribution of economic rent between owners and renters of marketable production quotas and examine how this distribution changes with increases in marginal costs while quota owners unambiguously lose because of a marginal cost increase quota renters may gain depending on whether the marginal cost shift is divergent parallel or convergent using output and input prices county production quotas and quota rental rate data we estimate a marginal cost function for north carolina flue cured tobacco to demonstrate how wage increases affect owners and renters welfare

politics and the effectiveness of foreign aid abstract critics of foreign aid programs have long argued that poverty reflects government failure in this paper i test predictions for aid effectiveness based on an analytical framework that relates aid effectiveness to political regimes i find that aid does not significantly increase investment nor benefit the poor as measured by improvements in human development indicators but it does increase the size of government the impact of aid does not vary according to whether recipient governments are liberal democratic or highly repressive but liberal political regimes and democracies ceteris paribus have on average 30 lower infant mortality than the least free regimes this may be due to greater empowerment of the poor under liberal regimes even though the political elite continues to receive the benefits of aid programs an implication is that short term aid targeted to support new liberal regimes may be a more successful means of reducing poverty than current programs

haircuts estimating investor losses in sovereign debt restructurings 1998 2005 abstract we calculate investor losses haircuts and recovery values in recent debt restructurings in russia ukraine pakistan ecuador argentina and uruguay haircuts are computed as the percentage difference between the present values of old and new instruments discounted at the yield prevailing immediately after the exchange recovery value means value received in terms of outstanding principal we find average npv haircuts ranging from 13 uruguay external exchange to 73 2005 argentina exchange recovery values range from 30 to about 75 we also find within exchange variations in haircuts and recovery values depending on the bond tendered with a few exceptions domestic residents do not appear to have been treated systematically better or worse than foreign residents

dynamic pricing for subscription services this paper investigates the use of pricing schemes in subscription services that consist of various combinations of activation subscription and cancellation fees when customers exclusively consider what is directly perceivable the activation fee starts low and increases as the network grows penetration strategy whereas the cancellation fee starts high and decreases as the network grows skimming strategy the activation and cancellation fees take various other forms otherwise the subscription fee remains low at the early stages and increases only when a reasonable number of subscribers is secured finally the authors discuss the theoretical and managerial implications of their findings

free to trade democracies autocracies and international trade trade relations we address this issue by analyzing the relationship between regime type and trade policy in a formal model of commercial policy we establish that the ratification responsibility of the legislature in democratic states leads pairs of democracies to set trade barriers at a lower level than mixed country pairs composed of an autocracy and a democracy we test this hypothesis by analyzing the effects of regime type on trade during the period from 1960 to 1990 the results of this analysis accord with our argument democratic pairs have had much more open trade relations than mixed pairs t he effects of domestic political institutions on trade policy have long been a source of controversy among social scientists despite the widespread interest that this debate has prompted however remarkably few studies have addressed the links between political regime type and commercial policy 1 most work on the political economy of trade policy that examines institutional factors focuses only on variations in policy among democracies and avoids comparing democracies with other types of regimes moreover many analyses of trade barriers especially those by economists ignore the effects of domestic political

balancing acquisition and retention spending for firms with limited capacity this paper discusses the interaction between revenue management and customer relationship management for a firm that operates in a customer retention situation but faces limited capacity we present a dynamic programming model for how the firm balances investments in customer acquisition and retention as well as retention across multiple customer types we characterize the optimal policy and discuss how the policy changes depending on capacity limitations we then contrast the modeling results with those of a behavioral experiment in which subjects acted as managers making acquisition and retention decisions in the modeling part of the paper we introduce a concept of the value of an incremental customer vic and show that when capacity is unlimited vic equals customer lifetime value clv but when capacity is limited vic is much smaller and changes dynamically depending on the number of customers and their mix as a result the optimal spending is constant and depends on clv for the firms with unlimited capacity but changes dynamically and is generally unrelated to clv when capacity is limited in the experimental part we introduce a concept of conditional optimality for the analysis of state dependent decisions applying this concept to our data we document a number of decision biases specifically the subjects tendency to overspend on retaining high value customers and underspend on lower value customers retention and acquisition we show that providing clv information exacerbates these biases and leads to a loss of net revenue when capacity is limited but providing information about the marginal costs of acquisition and retention eliminated these biases and increases net revenue data as supplemental material are available at http dx doi org 10 1287 mnsc 2013 1842 this paper was accepted by yossi aviv operations management

the effect of imf programs on labor abstract previous studies find that imf programs have negative effects on income distribution the international monetary fund and latin america economic stabilization and class conflict westview press boulder 1987a world dev 15 1987b 365 world dev 28 2000 1031 no study however has used parametric methods to control for nonrandom selection using a dynamic version of the heckman selection model i study the effect of imf programs on the labor share of income from manufacturing my conclusions are supported by 2 095 observations of 110 countries during 1961 93