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In: CESifo Working Paper Series No. 4839
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Working paper
In: American Journal of Agricultural Economics, Band 93, Heft 4, S. 936-948
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Working paper
In: Environmental and resource economics, Band 51, Heft 3, S. 453-470
ISSN: 1573-1502
The basic concern of this paper is the effect of private sponsorship of university research on the allocation of expenditures between public good research and commercial applications. Throughout the land-grant university system, there is much concern that as a result of reduced government funding, fundamental research will be neglected at the expense of research that is geared toward commercial applications. This paper attempts to shed some light on the relationship between research priorities and the availability of public funding for university research. In particular, we use both a static and a dynamic model to investigate the conditions under which university/private research partnerships can "crowd-in" or "crowd-out" basic science research as public funding becomes scarcer.
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We present a modeling approach for generating robust predictions about how changes in institutional, economic, and political considerations will influence the outcome of political negotiations over complex water-ecosystem policy debates. Evaluating the political viability of proposed policies is challenging for researchers in these complex natural and political environments; there is limited information with which to map policies to outcomes to utilities or to represent the political process adequately. Our analysis evaluates the viability of policy options using a probabilistic political viability criterion that explicitly recognizes the existence of modeling uncertainty. The approach is used to conduct a detailed case study of the future of California's Sacramento-San Joaquin Delta. Several other possible applications of the approach are briefly discussed.
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In: American Journal of Agricultural Economics, Band 80, Heft 4, S. 724-737
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We build a bargaining-theoretic model of an important dilemma inherent in any major political economic transition process. While swiftly removing the old order is a necessary condition for a successful transition, it also leads to widespread social disruption that may threaten the viability of the reform process. This issue lies at the heart of much of the "big-bang/gradualism" debate in the literature. We argue that this dichotomy is overly simplistic. In particular, the debate, as it has been framed, has failed to capture the significance of interest group competition. Interest group competition matters precisely because the political environment during a transition is fluid and malleable and is thus open to manipulation by interests seeking to mold post-transition governance structures to best serve themselves. As different economic and political structures will give rise to different incentives within these interest groups, one might expect that transition strategies will differ across societies. We show this is the case with two interesting examples. First, we consider how transition strategies differ in open and closed economies. We are able to derive a number of strong results, the most striking of which identifies conditions under which closed economies outperform open economies in terms of social welfare. Our second set of experiments examines Krueger's (1993) "vicious and virtuous circles" theory of policy reform. We identify conditions under which societies with political systems that reward rent-seeking behavior enjoy higher social welfare than societies with political systems that reward productive behavior.
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The Bulgarian land reform process is burdened by a fundamental tension between disruption and continuity. This tension arises from the dual roles played by the nomenklatura in the transition to a market economy. Both roles stem from their privileged status in the old order. While the nomenklatura have the potential to provide the agricultural sector with indispensable human capital, they also have the' potential to extract rents from the sector, thus undermining its competitiveness. Both the productivity of nomenklatura capital and their capacity to extract rents are diminished to the extent that the reform disrupts the established agrarian order. Thus in order to succeed, the agrarian reform process must sail between Scylla and Charybdis. Too much disruption degrades economic productivity, possibly to the extent of threatening the viability of the reform movement itself. Too much continuity skews the distribution of political power in favor of the nomenklatura, which may undermine the competitiveness of the nascent free market institutions. This chapter develops a formal political-economic model of this trade-off. The model challenges the conventional political economic wisdom that decoupling politics from economics will improve economic performance. In particular, we identify conditions under which the quality of the transition is enhanced by coupling the nomenklatura's acquisition of political power to the magnitude of the rents that they extract.
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Environmental policies are characterized by a growing emphasis on participation, devolution and negotiated decision making. Increasingly, centralized top down decision making systems are being replaced by new forms of local governance. In their strongest versions, these involve delegation of formal authority to local stakeholders who are expected to decide collectively upon the management rules of local common-pool resources. Devolution is particularly important in relation to the allocation and management of scarce water resources. Indeed the French water law of 1992 institutionalised the notion of devolution by requiring that water management rules be negotiated at the river basin level between all stakeholders. Although stakeholder negotiation is becoming increasingly important, relatively little is understood about the influence of the structure of negotiations on their outcomes. There is therefore a rising demand for applied simulation models which can be used as 'negotiation-support tools' to address such questions as: what criteria should determine participation rules ? What kind of biases result from power asymmetries ? In this paper, we apply the Rausser-Simon (RS) framework to a specific negotiation process, involving water use and storage capacity. The RS framework is a computable non cooperative bargaining model designed to study complex real world multi-agent, multi-issue negotiation problems. The elements of the modelled negotiation structure include: the list of participants at the bargaining table; the set of issues being negotiated; the decision rule; political weights ("access"); and the nature of the outcome if agreement cannot be reached (the fall-back option). The application we consider focuses on the upper part of the Adour Basin in south-western France. Increased irrigation use in recent years has led to recurrent water shortages, resulting in increased tensions among water users and potential damages to aquatic life. Public authorities have offered to finance new water supply facilities provided that stakeholders can agree on management issues such as quota allocations, water prices and dam configuration. A number of issues arise concerning the relationship between the structure of the negotiating process and the effectiveness with which participating stakeholders can pursue their individual interests. The case study is modelled with seven aggregate players (three aggregate farmers representing three sub-basins - upstream, midstream and downstream - two environmental lobbies, the taxpayer and the water manager), and with up to nine negotiated variables (water quotas and water prices in each sub- basin, and the capacities of three dams). Farmers' utility functions are estimated using hydraulic data and calibrated linear programming farm models. The richness of the data and institutional information available to us provides a realistic environment in which to examine the effect of negotiation structure on participant power. We focus in particular on the three farmer stakeholder group, whose interests are aligned but distinct, and so form a natural negotiating coalition. We construct experiments that enable us to evaluate the effects of negotiation structure on the effectiveness of this coalition. Our comparative statics experiments highlight a number of aspects of the relationship between negotiation structure and bargaining power. In addition to the standard indices of bargaining power - the distribution of access and "default strength" (i.e., stakeholders' relative tolerance for the outcome if negotiations break down) - our analysis identities a number of other less obvious sources of power. A coalition member can advance his own interests by ceding his own political access to another coalition member who has a "better" strategic location. It is also shown that while the interests of the coalition as a whole will be advanced if its members cede access to a "spokesman" representing their common interests, some coalition members may be adversely affected. Finally, we consider the effect on the coalition of restricting the set of proposals that may be placed on the bargaining table in order to mitigate "beggar thy neighbour" behaviour by coalition members. This improves all farmers' utilities, except in some specific cases in which external constraints initially oblige players to act as if they were playing cooperatively. In conclusion, the value of this model is to be used by the negotiation stakeholders to explore the implications of alternative specifications of 2 the bargaining environment. In particular, the simulations reveal that the ways in which the negotiation structure interact with stakeholder bargaining power are complex and lead to non intuitive outcomes.
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Environmental policies are characterized by a growing emphasis on participation, devolution and negotiated decision making. Increasingly, centralized top down decision making systems are being replaced by new forms of local governance. In their strongest versions, these involve delegation of formal authority to local stakeholders who are expected to decide collectively upon the management rules of local common-pool resources. Devolution is particularly important in relation to the allocation and management of scarce water resources. Indeed the French water law of 1992 institutionalised the notion of devolution by requiring that water management rules be negotiated at the river basin level between all stakeholders. Although stakeholder negotiation is becoming increasingly important, relatively little is understood about the influence of the structure of negotiations on their outcomes. There is therefore a rising demand for applied simulation models which can be used as 'negotiation-support tools' to address such questions as: what criteria should determine participation rules ? What kind of biases result from power asymmetries ? In this paper, we apply the Rausser-Simon (RS) framework to a specific negotiation process, involving water use and storage capacity. The RS framework is a computable non cooperative bargaining model designed to study complex real world multi-agent, multi-issue negotiation problems. The elements of the modelled negotiation structure include: the list of participants at the bargaining table; the set of issues being negotiated; the decision rule; political weights ("access"); and the nature of the outcome if agreement cannot be reached (the fall-back option). The application we consider focuses on the upper part of the Adour Basin in south-western France. Increased irrigation use in recent years has led to recurrent water shortages, resulting in increased tensions among water users and potential damages to aquatic life. Public authorities have offered to finance new water supply facilities ...
BASE
Environmental policies are characterized by a growing emphasis on participation, devolution and negotiated decision making. Increasingly, centralized top down decision making systems are being replaced by new forms of local governance. In their strongest versions, these involve delegation of formal authority to local stakeholders who are expected to decide collectively upon the management rules of local common-pool resources. Devolution is particularly important in relation to the allocation and management of scarce water resources. Indeed the French water law of 1992 institutionalised the notion of devolution by requiring that water management rules be negotiated at the river basin level between all stakeholders. Although stakeholder negotiation is becoming increasingly important, relatively little is understood about the influence of the structure of negotiations on their outcomes. There is therefore a rising demand for applied simulation models which can be used as 'negotiation-support tools' to address such questions as: what criteria should determine participation rules ? What kind of biases result from power asymmetries ? In this paper, we apply the Rausser-Simon (RS) framework to a specific negotiation process, involving water use and storage capacity. The RS framework is a computable non cooperative bargaining model designed to study complex real world multi-agent, multi-issue negotiation problems. The elements of the modelled negotiation structure include: the list of participants at the bargaining table; the set of issues being negotiated; the decision rule; political weights ("access"); and the nature of the outcome if agreement cannot be reached (the fall-back option). The application we consider focuses on the upper part of the Adour Basin in south-western France. Increased irrigation use in recent years has led to recurrent water shortages, resulting in increased tensions among water users and potential damages to aquatic life. Public authorities have offered to finance new water supply facilities ...
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Stakeholder negotiation is an increasingly important policymaking tool. However, relatively little is understood about the relationship between the structure of the negotiating process and the effectiveness with which stakeholders can pursue their individual interests. We apply the Rausser-Simon multilateral bargaining model to a specific negotiation process involving water storage capacity and use in the upper Adour Basin in southwestern France. We focus on a coalition of three stakeholder groups with aligned but distinct interests. In addition to the standard indices of bargaining power-the distribution of political weights ("access") and players' utilities if an agreement is not reached, our analysis identifi es other less obvious sources of power. First, a coalition member may benefit when his access is reduced if the redistribution increases the access of another coalition member who has a more favorable "strategic location." Second, the interests of the coalition as a whole will usually, but not always, be advanced if its members cede access to a "spokesman" representing their common interests. However, some members may be adversely affected. Third, restricting the extent to which coalition members can make proposals that further their own individual interests at the expense of other coalition members will usually, but not always, harm the coalition as a whole.
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