Suchergebnisse

This paper considers a simple dynamic decentralized leadership model with local borrowing and regional productivity enhancing investment. The central government is benevolent but cannot commit. The local governments strategically act while accounting for the ex post motive of the central government. We then investigate inefficiency in the subgame perfect equilibrium. We analyze the effect of central control on local borrowings. It is revealed that the central control is of no use. The model is extended to the case with residential mobility which gives different policy implications.

In this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing, private nursing and assistance in time by children. Private nursing can be financed either by financial aid from children or by private insurance. The social planner can use a number of instruments: public nursing, subsidy to aiding children, subsidy to private insurance premiums, all financed by a flat tax on earnings.

An optimal commodity tax approach is taken to compare trade taxes and VATs when some commodities are produced informally. Trade taxes apply to all imports and exports, including intermediate goods while the VAT applies only to sales by the formal sector and imports. The VAT can achieve production efficiency within the formal sector, but unlike the trade tax regime, it cannot indirectly tax pure profits. Making the size of the informal sector endogenous in each regime is potentially decisive. The ability of the government to change the size of the informal sector through costly enforcement may also tip the balance in favor of the VAT.

Politicians typically do not know what policies are best for achieving their broad objectives, so rely on bureaucrats for advice. Bureaucrats are better informed, so can manipulate outcomes by proposing policies that suit their interests. We capture this conflict of interests using a model of political decision-making that focuses on the interaction between politicians and the bureaucracies that advise them. In the basic model, a representative bureaucrat, knowing the characteristics of a given project, recommends to a representative politician whether to adopt it. If the politician chooses to adopt the project, its characteristics are revealed ex post. On the basis of the revealed outcome, the politician decides whether to discipline the bureaucrat. The bureaucrat anticipates imperfectly the chances of discipline when making an ex ante recommendation. When project characteristics are multi-dimensional, the politician can choose whether to seek advice from one bureaucrat or more than one. We compare outcomes in these centralized and decentralized regimes.

This paper examines regional population distribution when there is an interregional transfer policy without commitment. We introduce explicitly the following time structure of actions. Individuals make decisions on locational choices freely ex ante, but are immobile ex post. The interregional transfer policies by regional governments and the central govenment are implemented after individuals' migration decisions. We obtain the following results. First, locally stable time-consistent equilibria are single-community equilibria when there is a pure local public good. When we extend the basic model by taking account of capital, congestion, and spillovers in the provision of a public good, it is shown that whether or not central government intervention enhances the efficiency of the population distribution depends upon several economic factors.