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While assertions are often made that non‐cooperative fiscal policies suffer a contractionary bias, general equilibrium models have shown that the bias is unambiguously expansionary. This paper argues that the latter result relies on a particular and critical way of modelling international trade, and that under a more plausible trade structure, it is possible that fiscal policy is insufficiently expansionary in the non‐cooperative case. Non‐cooperative policy‐making thus implies that fiscal policies are used too little if they expand private employment, and too much if they contract private employment. Inefficiencies in non‐cooperative fiscal policies worsen when product markets become more integrated.

Moral values influence individual behavior and social interactions. A specially significant instance is the case of moral values concerning work effort. Individuals determine what they take to be proper behaviour and judge the others, and themselves, accordingly. They increase their esteem -and self-esteem- for those who perform in excess of the standard and decrease their esteem for those who work less. These changes in self-esteem result from the self-regulatory emotions of guilt or pride extensively studied in Social Psychology. We examine the interactions between sentiments, individual behaviour and the social contract in a model of rational voting over redistribution where individual self-esteem and relative esteem for others are endogenously determined. Individuals differ in their productivities. The desired extent of redistribution depends both on individual income and on individual attitudes toward others. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are simultaneously determined. The model has two types of equilibria. In "cohesive" equilibria, all individuals conform to the standard of proper behaviour, income inequality is low and social esteem is not biased toward any particular type. Under these conditions equilibrium redistribution increases in response to larger inequality. In a "clustered" equilibrium skilled workers work above the mean while unskilled workers work below. In such an equilibrium, income inequality is large and sentiments are biased in favor of the industrious. As inequality increases, this bias may eventually overtake the egoistic demand for greater taxation and equilibrium redistribution decreases. The type of equilibrium that emerges crucially depends on inequality. We contrast the predictions of the model with data on inequality, redistribution, work values and attitudes toward work and toward the poor for a set of OECD countries. ; Financial support from the Polarization and Conflict Project CIT-2-CT-2004-506084 funded by the European Commission-DG Research Sixth Framework Programme, Barcelona Economics (CREA), CICYT grant no. SEJ2006-00369, and the Instituto de Estudios Fiscales are gratefully acknowledged.

During the late 1980s and early 1990s, the Chinese economy experienced painful tradeoffs between high economic growth and low inflation: stimulating GDP growth would cause severe inflation spikes, while controlling inflation rates would seriously contract GDP growth. In 1994, the Chinese government initiated a series of macroeconomic reforms to revitalize the Chinese economy. After that, the inflation dropped steadily and eventually achieved the "soft landing" in 1996. The high GDP growth rate has also been stabilized. This research elucidates two core components embedded in China's 1994 program: currency sterilization and fiscal (revenue) centralization. The results suggest that classic economic models with nominal rigidity postulation may not be compatible with the Chinese economy.

Testimony issued by the General Accounting Office with an abstract that begins "Federal agencies spend billions of tax dollars each year to buy services--from clerical support to information technology assistance to the management of national laboratories. The federal government spent more than $87 billion in services--a 24 percent increase in real terms from fiscal year 1990. Some service procurements are not being done efficiently, putting taxpayer dollars at risk. In particular, agencies are not clearly defining their requirements, fully considering alternative solutions, performing vigorous price analyses, and adequately overseeing contractor performance. This testimony (1) describes service contracting trends and the changing acquisition environment, (2) discusses the challenges confronting the government in acquiring services, and (3) highlights some efforts underway to address these challenges. GAO found that purchases of services now account for about 43 percent of federal contracting expenses--the largest single spending category. The growth of services has been driven largely by the government's increased purchases of information technology services and professional, administrative, and management support services. Poor contract management has undermined the government's ability to obtain good value for the money and continues to be a major problem for the two biggest service purchasers-the Departments of Defense and Energy. Performance-based service contracts and the integration of strategic human capital management into agency planning are two ways to address some of the contract management and human capital challenges."

The combination of discretionary montetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labor-market distortions. Although an inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy if fiscal policy is set at a higher frequency than nominal wages are. To avoid the associated excessive accumulation of public debt, ceilings on public debt are called for. If countries differ substantially in terms of structural distortions or economic shocks, uniform debt ceilings must be complemented by country-specific debt targets in order to prevent decentralised fiscal authorities from employing debt policy strategically.

Scholars have long debated the role for courts with respect to governmental action that responds to crisis. Most of the crises analyzed, however, are exogenous to the political process; the courts' role in response to politically endogenous crises has received less attention. We evaluate the role of the judiciary in a subset of those endogenous crises: the judicial treatment of governmental efforts to resolve the crisis facing underfunded public pensions. Assessing institutional competence schematically with reference to an institution's democratic accountability and fact-finding ability, we argue that, where institutions function properly, judicial intervention in politically endogenous economic crises should be close to nonexistent. But when they must occur – and, consistent with doctrines of justiciability, some adjudication of governmental action in the fiscal context will be inevitable – we argue that such intervention should respect the judiciary's comparative institutional incompetence by treading lightly, constitutionally speaking: where the relevant law allows discretion, and where a non-constitutional determination is possible, courts addressing the state's fiscal policy-making apparatus should avoid constitutional pronouncements entirely. After developing a preliminary framework for assessing this decision rule, we apply it to a hard case (where the statute and contract is silent as to whether executory pension contracts are subject to constitutional protection against modification) and an easy case (where there is a reservation of rights for that very modification). Unfortunately, courts have erred in both the hard and easy cases; our framework explains why the law is not only consistent with our decision rule, but why comparative institutional competence compels the result. In both the easy and the hard cases, the point is not to promote or demote the interests of a single class or faction active within the fiscal policy-making process – whether bondholders, public unions, taxpayers, or the government – but to locate that policy-making process within the most democratically responsive and empirically competent institutions. With this framework, we evaluate the recent effort of the San Jose Superior Court to address these issues. We conclude that the court got the easy case exactly wrong.

In countries with large or potentially large oil and gas deposits, the resource and its extraction tend to become vital cornerstones of the economy. However, uncertainties involved in finding commercial quantities of oil and gas and the intensive capital required for undertaking exploration and production result in significant business risks. The petroleum fiscal systems in many developing countries are now opting for production‐sharing contracts (PSC) as a new model of agreement for the exploration and production of oil and gas resources. This paper extends the principal‐agent theory to foster understanding of partnership between the host government and its foreign contractor in the realm of PSC. The theory highlights the importance of moral hazard and adverse‐selection problems. To avoid these uncertainties and asymmetric information, the principal (national oil company) needs to design an incentive contract that induces the agent (international oil company (IOC)) to undertake actions that will maximise the principal's welfare. Under a PSC, the state has to offer contract terms that are attractive enough for the IOC to enter into an agreement. At the same time, the terms must allow the state to receive maximum economic returns from the venture.

Intro -- GOVERNMENT CONTRACTS AND SMALL MINORITY-OWNED BUSINESSES: CHALLENGES AND ASSISTANCE -- GOVERNMENT CONTRACTS AND SMALL MINORITY-OWNED BUSINESSES: CHALLENGES AND ASSISTANCE -- Library of Congress Cataloging-in-Publication Data -- CONTENTS -- PREFACE -- Chapter 1: GOVERNMENT CONTRACTING: FEDERAL EFFORTS TO ASSIST SMALL MINORITY-OWNED BUSINESSES -- ABBREVIATIONS -- WHY GAO DID THIS STUDY -- WHAT GAO FOUND -- BACKGROUND -- Federal Goals for Contracting with Small Businesses -- Federal Agency Contracting Assistance for Small Businesses -- AGENCIES AND ADVOCACY GROUPS IDENTIFIED VARIOUS CONTRACTING CHALLENGES THAT MINORITY-OWNED BUSINESSES MAY FACE -- Agency and Advocacy Group Officials Differed in Their Opinions on Contracting Challenges That Minority-Owned Businesses May Face -- Performance History -- Knowledge of the Federal Contracting Process -- Contract Bundling -- Lack of Access to Contracting Officials -- Lack of Monitoring of Subcontracting Plans -- Lack of Access to Capital and Other Resources -- Linguistic and Cultural Barriers -- Agency Outreach Efforts Help Address Some Challenges Facing Small and Minority-Owned Businesses -- FEDERAL AGENCIES COLLECT SOME INFORMATION ON CONTRACTING ASSISTANCE PROVIDED TO MINORITYOWNED BUSINESSES -- AGENCY COMMENTS AND OUR EVALUATION -- APPENDIX I: OBJECTIVES, SCOPE, AND METHODOLOGY -- APPENDIX II: PERCENTAGE OF OBLIGATED FUNDS FOR CONTRACTS TO SOCIOECONOMIC CATEGORIES BY MINORITY GROUP, FISCAL YEAR 2011 -- APPENDIX III: SELECTED FEDERAL GOVERNMENT CONTRACTING PROGRAMS, RESOURCES, AND OUTREACH ACTIVITIES -- APPENDIX IV: POTENTIAL APPLICABILITY OF THE LIMITED ENGLISH PROFICIENCY EXECUTIVE ORDER TO FEDERAL CONTRACTING -- End Notes -- End Notes for Appendix I

For the Western world, the challenges of the 21st Century are numerous, from climate change's effects on food production and coastal cities to underfunded social safety nets to automation's impact on the middle class. To handle such costly problems, government intervention will be required. Government intervention, however, always comes at a cost to either individuals or corporations. To determine who should bear these costs, scholars and experts should turn to notions of fiscal citizenship – the social contract between the state and private parties through taxation and the provision of goods and services. By applying principles of individual fiscal citizenship to corporations, which have traditionally not been included in notions of fiscal citizenship, a strong case emerges for corporations to bear the costs of these impending 21st century harms.

This paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political "fundamentals" can sustain such different systems of social insurance, fiscal redistribution, and education finance as those of the United States and Western Europe. With imperfect credit and insurance markets some redistributive policies can improve ex ante welfare, and this implies that their political support tends to decrease with inequality. Conversely, with credit constraints, lower redistribution translates into more persistent inequality; hence the potential for multiple steady states, with mutually reinforcing high inequality and low redistribution, or vice versa. (JEL D31, E62, P16, O41, I22)

A letter report issued by the General Accounting Office with an abstract that begins "Pursuant to a congressional request, GAO reviewed federal advertising contracts awarded to advertising firms, focusing on: (1) the discretion that federal agencies have in determining a contract's scope of work and the contractor requirements for awarding advertising contracts; (2) whether contractor requirements in the solicitations for contracts were consistent with the scope of work described in the solicitations for the advertising contracts with first-time obligations in fiscal years 1998 and 1999 that were awarded to large advertising firms through full and open competition; and (3) whether there was required documentation for the sole-source justification and approval for the advertising contracts with first-time obligations in fiscal years 1998 and 1999 that were awarded through sole-source procedures."

Credit markets typically freeze in recessions: access to credit declines, and the cost of credit increases. A conventional policy response is to rely on monetary tools to saturate financial markets with liquidity. Given limited space for monetary policy in the current economic conditions, we study how fiscal stimulus can influence local credit markets. Using rich geographical variation in US federal government contracts, we document that, in a local economy, interest rates on consumer loans decrease in response to an expansionary government spending shock.

Credit markets typically freeze in recessions: access to credit declines, and the cost of credit increases. A conventional policy response is to rely on monetary tools to saturate financial markets with liquidity. Given limited space for monetary policy in the current economic conditions, we study how fiscal stimulus can influence local credit markets. Using rich geographical variation in US federal government contracts, we document that, in a local economy, interest rates on consumer loans decrease in response to an expansionary government spending shock.

In an increasingly budget-constrained environment, the Department of Defense (DOD) must maximize the value of fiscal resources obligated to service contracts. According to the Government Accountability Office report モStrategic Sourcingヤ published in 2013, over half of procurement spending between 2008 and 2013 was obligated to service contracts. Therefore, this research focused on identifying rate, process, and demand savings for common recurring DOD service requirements. We developed a methodology to standardize analysis of service requirements to identify relevant cost drivers. Furthermore, a clustering continuum was created to organize services based on proximity between the customer-supplier base. Utilizing commercial business mapping software, we analyzed the cost driver data, produced visualizations, and illustrated strategic opportunities for Category Management initiatives. Requirements for Integrated Solid Waste Management (ISWM) within the Los Angeles area were evaluated using the software and methodology to demonstrate a model for practical application. This research resulted in two findings: rate and demand savings were inconclusive but suggested opportunities do exist, and significant opportunities for process savings exist across the DOD. Further research is needed to quantify rate and demand savings and identify other opportunities to achieve efficiencies through Category Management of service requirements. We also recommend that future research focus on proximity-independent services. ; Naval Postgraduate School Acquisition Research Program