Pub Date : 2018-10-31DOI: 10.1332/251569118x15388187616080
Nimai M. Mehta
This paper returns to Adam Smith's much maligned distinction of productive versus unproductive labour to flesh out a dimension of capital productivity that has been missed by the modern theory of production and welfare. The puzzle lies in Smith's use of a binary measurement scale to suggest opposing productivity, and household welfare outcomes obtained with a durable versus non-durable good. A durable good generates a permanent fund of labour savings and service spillovers over time. This dimension of productivity exists separate from, and beyond, any marginal productivity attributed to capital or labour services within the neoclassical production function. And, it forms the basis of improvements in household welfare that Smith described in the Wealth of Nations – in terms of continual net increases in the consumption-production possibility frontier enjoyed by the household, as a result of service spillovers obtained with a durable good over time. In contrast, no such spillovers are obtained with a non-durable good. A preference-bias for non-durable goods, instead, proves to be welfare-reducing – by having households under-invest and/or fail in maintaining the accumulated stock of durable-goods-as-capital. Both lead to a loss of production-consumption possibilities available within the household economy. An exploration of Smith's concern with 'unproductive labour' brings back into focus the broad set of behavioural traits and ethical-legal restraints that underlie economic progress and have been missed by neoclassical theory.
{"title":"The productive-unproductive puzzle in Adam Smith: what have we missed?","authors":"Nimai M. Mehta","doi":"10.1332/251569118x15388187616080","DOIUrl":"https://doi.org/10.1332/251569118x15388187616080","url":null,"abstract":"This paper returns to Adam Smith's much maligned distinction of productive versus unproductive labour to flesh out a dimension of capital productivity that has been missed by the modern theory of production and welfare. The puzzle lies in Smith's use of a binary measurement scale to\u0000 suggest opposing productivity, and household welfare outcomes obtained with a durable versus non-durable good. A durable good generates a permanent fund of labour savings and service spillovers over time. This dimension of productivity exists separate from, and beyond, any marginal\u0000 productivity attributed to capital or labour services within the neoclassical production function. And, it forms the basis of improvements in household welfare that Smith described in the Wealth of Nations – in terms of continual net increases in the consumption-production possibility\u0000 frontier enjoyed by the household, as a result of service spillovers obtained with a durable good over time. In contrast, no such spillovers are obtained with a non-durable good. A preference-bias for non-durable goods, instead, proves to be welfare-reducing – by having households under-invest\u0000 and/or fail in maintaining the accumulated stock of durable-goods-as-capital. Both lead to a loss of production-consumption possibilities available within the household economy. An exploration of Smith's concern with 'unproductive labour' brings back into focus the broad set of behavioural\u0000 traits and ethical-legal restraints that underlie economic progress and have been missed by neoclassical theory.","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":" ","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49339990","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-10-31DOI: 10.1332/251510818X15368388991035
A. Hoffer, R. Sobel
Many, but not all, US state governments have adopted 'preference policies' that give an advantage to in-state businesses (vendors) who submit bid proposals for state projects. Most preference policies are specified in terms of a specific percentage advantage, which means that an in-state vendor will be chosen even if they submit a higher bid than a lower-cost out-of-state vendor. Some states have broad policies that apply to all or virtually all state contracts, while others apply these policies selectively only to one or a few specific goods and services. We estimate the effects of these policies on the costs of government. We find that preference policies are associated with a $167 increase per person in state construction costs and a $176 increase per capita in capital expenditures. In addition, we find that states implementing preference policies experienced a one unit decline in their economic freedom scores.
{"title":"Preference policies: perpetual costs of distributive politics","authors":"A. Hoffer, R. Sobel","doi":"10.1332/251510818X15368388991035","DOIUrl":"https://doi.org/10.1332/251510818X15368388991035","url":null,"abstract":"Many, but not all, US state governments have adopted 'preference policies' that give an advantage to in-state businesses (vendors) who submit bid proposals for state projects. Most preference policies are specified in terms of a specific percentage advantage, which means that an in-state\u0000 vendor will be chosen even if they submit a higher bid than a lower-cost out-of-state vendor. Some states have broad policies that apply to all or virtually all state contracts, while others apply these policies selectively only to one or a few specific goods and services. We estimate the\u0000 effects of these policies on the costs of government. We find that preference policies are associated with a $167 increase per person in state construction costs and a $176 increase per capita in capital expenditures. In addition, we find that states implementing preference policies\u0000 experienced a one unit decline in their economic freedom scores.","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":" ","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44801228","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-10-31DOI: 10.1332/251569118X15402013042785
Francesco Forte, G. Brady
This paper examines the influence of Frank Knight on James Buchanan during the latter's time as a student at the University of Chicago through to the successive periods of his life. We maintain that Knight's approach to economics and politics – in which individual freedom, (institutional) rules of the game and ethical rules are all paramount in explaining behaviours in both the market and the public sector – strongly influenced Buchanan's interdisciplinary intellectual enterprise. In this context, we stress Knight's influence on Buchanan's catallactic approach to both the formation of rules at the constitutional level and ordinary level, as well as for the behaviour of individuals interacting in the market and public sector. In this inheritance, the relevance of ethical values for economic progress and protection of a good, free society increased during Buchanan's last period of scientific research, with positive and normative levels always carefully distinguished, as in the Frank Knight tradition.
{"title":"James M. Buchanan: from Chicago to Virginia and Knight's influence on Buchanan","authors":"Francesco Forte, G. Brady","doi":"10.1332/251569118X15402013042785","DOIUrl":"https://doi.org/10.1332/251569118X15402013042785","url":null,"abstract":"This paper examines the influence of Frank Knight on James Buchanan during the latter's time as a student at the University of Chicago through to the successive periods of his life. We maintain that Knight's approach to economics and politics – in which individual freedom, (institutional)\u0000 rules of the game and ethical rules are all paramount in explaining behaviours in both the market and the public sector – strongly influenced Buchanan's interdisciplinary intellectual enterprise. In this context, we stress Knight's influence on Buchanan's catallactic approach to both\u0000 the formation of rules at the constitutional level and ordinary level, as well as for the behaviour of individuals interacting in the market and public sector. In this inheritance, the relevance of ethical values for economic progress and protection of a good, free society increased during\u0000 Buchanan's last period of scientific research, with positive and normative levels always carefully distinguished, as in the Frank Knight tradition.","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":" ","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42763740","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-10-31DOI: 10.1332/251569118X15388187137839
Ryan H. Murphy
Recent research has explored the determinants of economic freedom, an important measure of institutional quality. Concurrently, some scholars have posited a negative relationship between the quality of economic institutions and democracy, specifically at very high levels of democracy. This paper disaggregates the Polity IV index into a vector of 20 dummy variables to explore how differing degrees of democracy and autocracy may impact economic freedom, thereby leaving open the possibility for levels of democracy modestly less than perfect democracy to have better effects on economic freedom. This paper will also consider the Vreeland re-estimate of the Polity IV index, the Grundler-Kreiger measure of democracy, the use of a quadratic term, and quantile regression. The weak evidence that is found points to a modest positive relationship between democracy and economic freedom, with little evidence that marginally less democracy will subsequently lead to more economic freedom.
{"title":"Imperfect democracy and economic freedom","authors":"Ryan H. Murphy","doi":"10.1332/251569118X15388187137839","DOIUrl":"https://doi.org/10.1332/251569118X15388187137839","url":null,"abstract":"Recent research has explored the determinants of economic freedom, an important measure of institutional quality. Concurrently, some scholars have posited a negative relationship between the quality of economic institutions and democracy, specifically at very high levels of democracy.\u0000 This paper disaggregates the Polity IV index into a vector of 20 dummy variables to explore how differing degrees of democracy and autocracy may impact economic freedom, thereby leaving open the possibility for levels of democracy modestly less than perfect democracy to have better\u0000 effects on economic freedom. This paper will also consider the Vreeland re-estimate of the Polity IV index, the Grundler-Kreiger measure of democracy, the use of a quadratic term, and quantile regression. The weak evidence that is found points to a modest positive relationship between\u0000 democracy and economic freedom, with little evidence that marginally less democracy will subsequently lead to more economic freedom.","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1332/251569118X15388187137839","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42484573","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I explore the impact of public defender and prosecutor elections using caseload data from Florida. While most states within the US use popular elections to select and retain prosecutors, public defenders are typically appointed positions. Florida is novel in that for both positions, popular, partisan elections are used to select the office’s leader. I first document important distortions in pre-trial case handling. A public defender re-election is associated with an increase in the proportion of cases resolved via plea bargaining, while prosecutor re-elections are associated with less plea bargaining. At the trial phase, I present evidence that public defender re-elections are associated with a decrease in the proportion of jury trials that result in a conviction, while a prosecutor re-election coincides with an increase in the conviction rate. The results are consistent with voters holding both elected officials accountable for doing their job. Public defenders obtain plea bargains at a higher rate and secure acquittals for their clients when up for re-election. Prosecutors do not plea bargain as much and win at trial when up for re-election.
{"title":"Debundling accountability: prosecutor and public defender elections in Florida","authors":"Bryan C. McCannon","doi":"10.2139/SSRN.3204623","DOIUrl":"https://doi.org/10.2139/SSRN.3204623","url":null,"abstract":"\u0000 I explore the impact of public defender and prosecutor elections using caseload data from Florida. While most states within the US use popular elections to select and retain prosecutors, public defenders are typically appointed positions. Florida is novel in that for both positions, popular, partisan elections are used to select the office’s leader. I first document important distortions in pre-trial case handling. A public defender re-election is associated with an increase in the proportion of cases resolved via plea bargaining, while prosecutor re-elections are associated with less plea bargaining. At the trial phase, I present evidence that public defender re-elections are associated with a decrease in the proportion of jury trials that result in a conviction, while a prosecutor re-election coincides with an increase in the conviction rate. The results are consistent with voters holding both elected officials accountable for doing their job. Public defenders obtain plea bargains at a higher rate and secure acquittals for their clients when up for re-election. Prosecutors do not plea bargain as much and win at trial when up for re-election.\u0000","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":" ","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48690856","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Bruni L., Reciprocità: dinamiche di cooperazione, economia e società civile","authors":"Alberto Batinti","doi":"10.51952/pzpc3227","DOIUrl":"https://doi.org/10.51952/pzpc3227","url":null,"abstract":"","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70624097","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The conventional approach to public finance contributes to the growth in the scope of governments under liberal democracy. Orthodox analysis of tax policy utilizes a framework that aims to satisfy government revenue objectives while doing the least additional harm to the economy. An unintended consequence arises from the search for ‘optimal’ tax rates or revenue-neutrality of tax cuts that economists rely upon to ease the path to higher public-sector spending. We deem this a ‘macro’ approach that involves a top-down perspective in that it places government at the heart of the issue. An alternative approach to public finance is derived from seminal contributions by Knut Wicksell. We deem this a ‘micro’ approach to tax policy that shifts the perspective of tax policy to individual taxpayers. Applying the insights of Wicksell to public finance inquiries can contribute to halting and perhaps reversing the growth trends of governments under democracy.
{"title":"‘Just’ Tax Policies for Market-Based Democracies – An Introduction to a Wicksell Constitutional Approach","authors":"K. Wickman, C. Lingle","doi":"10.51952/vhap7207","DOIUrl":"https://doi.org/10.51952/vhap7207","url":null,"abstract":"The conventional approach to public finance contributes to the growth in the scope of governments under liberal democracy. Orthodox analysis of tax policy utilizes a framework that aims to satisfy government revenue objectives while doing the least additional harm to the economy. An unintended consequence arises from the search for ‘optimal’ tax rates or revenue-neutrality of tax cuts that economists rely upon to ease the path to higher public-sector spending. We deem this a ‘macro’ approach that involves a top-down perspective in that it places government at the heart of the issue. An alternative approach to public finance is derived from seminal contributions by Knut Wicksell. We deem this a ‘micro’ approach to tax policy that shifts the perspective of tax policy to individual taxpayers. Applying the insights of Wicksell to public finance inquiries can contribute to halting and perhaps reversing the growth trends of governments under democracy.\u0000","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70624148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Layard, R. Happiness: Lessons from a New Science","authors":"E. Galli","doi":"10.51952/vygl1975","DOIUrl":"https://doi.org/10.51952/vygl1975","url":null,"abstract":"","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70624190","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We attempt to present a classical liberal perspective on the subject of taxation and justice. We Start by reviewing the development of the notion of justice over time and across various schools of thought. We then proceed to examine John Rawls’ theory of justice and its policy implications and economic theory of optimal taxation. After finding both approaches unsatisfactory, we defend a libertarian stand on the issue of justice. The main result of our reflections are three criteria which we afterwards use to examine normatively different ways of taxation. We conclude by saying that current tax Systems satisfy neither of these criteria and deserve being changed.
{"title":"Taxation and Justice: A Classical Liberal Perspective","authors":"Petra Orogványiová","doi":"10.51952/przx4958","DOIUrl":"https://doi.org/10.51952/przx4958","url":null,"abstract":"We attempt to present a classical liberal perspective on the subject of taxation and justice. We Start by reviewing the development of the notion of justice over time and across various schools of thought. We then proceed to examine John Rawls’ theory of justice and its policy implications and economic theory of optimal taxation. After finding both approaches unsatisfactory, we defend a libertarian stand on the issue of justice. The main result of our reflections are three criteria which we afterwards use to examine normatively different ways of taxation. We conclude by saying that current tax Systems satisfy neither of these criteria and deserve being changed.","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70624084","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Gigliobianco A., Via Nazionak – Banca d’Italia e classe dirigente, cento anni di storia","authors":"Domenico da Empoli","doi":"10.51952/hlol2070","DOIUrl":"https://doi.org/10.51952/hlol2070","url":null,"abstract":"","PeriodicalId":53126,"journal":{"name":"Journal of Public Finance and Public Choice","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70623908","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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