Journal of Government and Economics最新文献

What happens when sovereign governments coordinate their tax policies? This is an important research topic in government and economics. We focus on implications of re-allocating taxing rights away from source countries (where goods are produced) to market countries (where goods are consumed) and introducing minimum rates in international profit taxation. Utilizing a dynamic macroeconomic model, we find that, in low tax economies, the average profit tax rate will rise. On one hand, this reduces price competitiveness of firms located in these regions and, thereby, output. On the other hand, higher profit tax revenues help to reduce other taxes. Moreover, lower expected future output requires less capital in production in the long run. Firms hence invest less and (temporarily) augment dividend payments. This raises disposable income of households, who (at least temporarily) increase consumption. The opposite holds for high tax economies. In terms of welfare, low tax economies can benefit from an increase in profit taxation. Reduced “tax avoidance” and higher repatriation of firm profits only changes this picture for relatively high levels of initial profit shifting.

Despite studies finding a link between political dynasty prevalence and poverty, empirical evidence in the Philippines shows that the relationship between dynastic concentration and underdevelopment is not the same across regions. We argue that an independent economic elite and high levels of economic activity, typically found in Luzon, affect the poverty and development impact of political dynasties. Local socioeconomic contexts shape the opportunities for predatory behavior among politicians and their relationships with economic elites. Using novel survey data on business-government linkages as well as an extensive dataset on local government leadership in the Philippines spanning 2004 to 2016, we find that political dynasties exacerbate poverty in the resource-rich non-Luzon provinces but not in Luzon where there is a competitive business environment.

Using data from 29 European countries over 2002Q1–2019Q4, we estimate automatic stabilizers using various techniques, and show that the use of simple measures of government size as proxies is based on assumptions that are unrealistic and potentially misleading. Relaxing these assumptions allows us to construct measures of automatic stabilizers which are based on revenue and expenditure elasticities that are estimated directly using the regression-based approach and allowed to vary across countries. We demonstrate that higher automatic stabilizers are associated with lower output volatility, and the relationship is statistically significant and remarkably robust. At the same time, however, the “stabilization benefit” of automatic stabilizers is shown to have varied considerably across countries and over time.

This purpose of this paper is to analyze pension policy in an autocracy, using contemporary Hungary as a context. The inefficiencies and unfairness of the current policy can be characterized by tensions: the intra- and intercohort polarization of benefits rises, the difference between the loose retirement age for females with long entitlement and the otherwise rigid retirement age widens. Conclusion: it would be easier to reduce these tensions in a rebuilt democracy but even an autocracy cannot avoid some reforms.

The transition towards a carbon-neutral economy is a fundamental change, it involves not only transforming the energy sector but also radical reforms across the whole economy. Managing fundamental and wholesale change across such a large economy is a massive coordination challenge requiring the simultaneous deployment of a collection of instruments and institutional change. This paper looks into the key challenges in building a carbon-neutral economy and discusses how governments and markets should work together in addressing these challenges. Due to significant failures in key markets relevant to tackling carbon emissions and to the absence of crucial markets, this paper argues that governments must play an active role in formulating and implementing effective environmental policies, regulations and design. This paper discusses major market failures and market absence, leading to suggestions on policy measures that governments should take to overcome these challenges, enabling markets to give better signals in directing resource allocation and guiding the low-carbon transition. Governments must act to facilitate a transition that enables equity in opportunities and outcomes across regions and individuals. Implementing these strategies and policies requires cohesive government structures, led from the most senior levels, to foster the necessary investment, innovation and change needed.

We examine the effectiveness of non-pharmaceutical government interventions (NPIs) against COVID-19. In particular, we focus on the impact of strictness and variability in government interventions on the reproduction rate ($R_t$) and the number of new deaths (per million of inhabitants) in five different world regions (G7, G20, EU28, Central America and Asia). In line with existing evidence, we observe that more stringent and frequent NPIs contributed to slow down contagion. Unfortunately, no benefits in terms of mortality are found. In fact, with few exceptions, both strictness and variability in NPIs are associated with a rise in the number of new deaths. This evidence is observed to be stronger among advanced economies and over the second pandemic wave. Take together, our research findings advocate early and decisive implementation of NPIs, but gradual and staggered relaxation of NPIs when the pandemic appears to recede.

A key to understand the evolution of an economy is the property rights institution and the contracting institution that the government set up to shape the business environment of private firms. Focusing on China during its crucial two decades of transition (from the early 1990s to the early 2010s), this paper documents how the country's business environment and the characteristics of entrepreneurs evolved, along with the role played by local governments. Relying on multiple comprehensive data sets, the paper shows that many aspects of local business environments improved: infrastructure, development of the court system, and access to external finance. Meanwhile, the share of politically connected private firms remained large, and their advantage in accessing key resources increased. Under this dual-track private sector development, private firms became larger and more innovative and adopted more formal corporate governance mechanisms. Entrepreneurs became better educated, with more diverse sectoral experiences. Market competition increased over time, especially after China's World Trade Organization entry. The paper offers suggestive evidence that this dual track development had negative consequences, such as a lower tendency to innovate by politically connected firms.

It has been widely recognized that population ageing could generate structural changes centered around a dwindling labor force, on one hand, and an expanding dependency on the generosity of the welfare state, on the other hand. Welfare state policy related to population ageing entails both fiscal and migration issues. This paper employs a general-equilibrium model with a policy making focus to help illuminate the mechanisms governing social benefit provision, labor income taxation, capital income taxation, and migration curbs on low-skilled and high-skilled workers, all driven by population ageing. Greater generosity of the welfare state comes together with a more liberal migration policy when incentives are compatible with the interests of the majority of voters. The effects of ageing on the tax and benefit sides of the welfare state depend on the number of dependents in the population and whether the country is a capital importer (in which case the capital tax burden is shared with foreigners) or a capital exporter (in which case the age-related wage increase skews taxation towards labor income). The tax-benefit narraive is about factor supplies. Low ageing evolution correlates with a relatively labor-abundant country (low retirement), which turns into a labor-scarce country (high retirement). Parallel to the evolution of the labor force, a country that is a capital importer (with a high rate of return) becomes a capital exporter (with a low rate of return). Greater demand for social benefits from an ageing population is balanced against the rising costs of labor income taxation and capital income taxation.

When a governmental crisis subsides, citizens are apt to wonder whether all the deficit spending is going to cost something. This situation is the subject of wildly differing views. Which view appears to be most nearly right? The Keynesian view that public debt serves to pull up employment, thus reducing the unemployment rate and inducing higher participation? Or the neoclassical view that public debt sets the capital stock onto a lower path, thus decreasing the labor force and employment?

In this paper, we investigate the root cause for large MSMEs finance gap. We advance five propositions for the mechanism through which the distorted financial structure generated by a comparative-advantage-defying strategy leads to large MSMEs finance gap. We then use panel data from 115 countries to test the propositions and find that, the adoption of a comparative-advantage-defying strategy accelerates the development of state-owned enterprises in capital-intensive industries, leading to concentrated banking sector and oversized state-owned enterprises obtaining high proportions of loans and enjoying low interest rate on borrowings. Finally we use cross-sectional data in 2017 to show that the adoption of a comparative-advantage-defying strategy is associated with large MSMEs finance gap. The paper suggests that the root cause for large MSMEs finance gap is the government's inappropriate development strategy.