Transport Subsidies, System Choice, and Urban Sprawl

This paper analyzes the effect of transport subsidies on the spatial expansion of cities, asking whether subsidies are a source of undesirable urban sprawl. While the cost-reducing effect of transport subsidies is offset by a higher general tax burden (which reduces the demand for space), the analysis shows that subsidies nevertheless lead to spatial expansion of cities. If the transport system exhibits constant returns to scale, the subsidies are inefficient, making the urban expansion they entail undesirable. The paper also studies transport ‘system choice.’ The city is portrayed as selecting its transport system from along a continuum of money-cost/time-cost choices.transport subsidies, urban sprawl, spatial expansion of cities, transport, urban expansion

Diverging Paths: Transition in the Presence of the Informal Sector

This work suggests a development of the seminal model of transition from plan to market economy by Aghion and Blanchard (1994). We introduce an informal sector to show that its presence can generate qualitatively di?erent steady states, to which the economy converges in the end of transition. Two types of transitional dynamics are considered, and it is argued that they can help explain di?erences in evolution of formal and informal output exhibited, on the one hand, by East European countries and, on the other hand, by the former Soviet Union republics such as Russia or Ukraine.http://deepblue.lib.umich.edu/bitstream/2027.42/40075/3/wp689.pd

Essays on Crime and Tax Evasion

This dissertation consists of three essays addressing two issues related to crime and tax evasion. The first essay investigates the relationship between property and violent crime with law enforcement expenditures. The second essay examines the market structure in transition economies and the effects on firm-level tax evasion. The third essay investigates the incidence of tax evasion in a general equilibrium framework. The topics in all three essays are linked by their focus on criminal or illegal behavior. The essays also answer questions related to developing sound governmental policy and decision-making. Chapter one attempts to identify the impact on crime of increasing law enforcement expenditures. We examine the specific channels the public has to influence crime (e.g., the level of expenditures, the number of police officers), to determine what role, if any, they may play in influencing crime rates for property crime and for violent crime. Conclusions in previous research are equivocal, and often do not adequately address the obvious simultaneity of crime and enforcement efforts. We use the Arellano-Bond system GMM estimation method to control for this simultaneity. Results from our preferred GMM estimation method show clearly that increases in law enforcement expenditures help reduce crime rates; other methodologies typically give results that are not robust. The second chapter extends previous empirical work evaluating the determinants of tax evasion by firms in which tax evasion may be similar to a tax advantage under the law. This chapter contributes to the tax evasion literature by identifying market structures in which it may be easier to evade or where high levels of evasion take place. Results indicate that fighting corruption is still an important factor in determining the level of evasion. However, the data also suggests a long run situation in which the tax advantage of evasion has been replicated and competed away; more competitive markets have lower levels of evasion whereas monopolistic markets have higher levels of evasion. Further, tax evasion will occur in more service oriented industries. Chapter three develops and calibrates a general equilibrium model to investigate how tax evasion affects the incidence of taxes. Previous tax incidence work has considered tax evasion; however little has been done considering the distributional impact of tax evasion. There may be cases in which individuals, other than evaders, indirectly benefit or lose from tax evasion. This work contributes to the literature by clearly linking the individual or firm decision to evade to a general equilibrium analysis of tax evasion using microeconomic foundations. Including evasion decisions in tax incidence analysis has implications for both tax policy and enforcement agency decision making, and is an important step toward understanding how evasion affects the whole economy

Diverging Paths: Transition in the Presence of the Informal Sector

This work suggests a development of the seminal model of transition from plan to market economy by Aghion and Blanchard (1994). We introduce an informal sector to show that its presence can generate qualitatively di?erent steady states, to which the economy converges in the end of transition. Two types of transitional dynamics are considered, and it is argued that they can help explain di?erences in evolution of formal and informal output exhibited, on the one hand, by East European countries and, on the other hand, by the former Soviet Union republics such as Russia or Ukraine.optimal speed of transition, informal economy, search models

Measuring the size and development of the informal economy in the countries of the Balkan peninsula using structural equation modelling approach

A thesis submitted to the University of Bedfordshire in partial fulfilment of the requirements for the degree of Doctor of PhilosophyThis thesis presents estimates and analysis of the informal economy for ten countries in the Balkan Peninsula region. It is the first attempt to study the size and development of the informal economy in these southeastern European countries from 1996 to 2014 using a special case of the Structural Equation modelling, which is the MIMIC model. There is currently a gap in the literature focusing on measuring the size of the informal economy in the Balkan countries especially after social, economic, political and judiciary reforms that the region has undergone. Such reforms are likely to influence the trend of the informal economy, and hence it is important to study the development of the informal economy. Different from existing literature, this research uses policy-driven indicators as well as macroeconomic variables in the model to estimate the size of the informal economy in this part of the world. The estimates indicate that there is a declining trend in the size of the informal economy in most of these countries. The yearly average size of the informal economy in these ten countries started from around 31 percent in 1996 and dropped to around 26 percent in 2014. However, the overall average size of the informal economy in these Balkan countries remains high relative to GDP, and it is just over 30 percent. The results indicate that countries, where the overall average size of the informal economy is found to be the highest as a proportion to their GDP, are FYR Macedonia, Bosnia and Herzegovina, Albania and Turkey with 38.4 percent, 33.3 percent, 33.0 percent, and 32.1 percent, respectively. Countries with the lowest informal economy, on the other hand, are Slovenia and Greece, with 25 percent and 26.9 percent, respectively. The average size of the informal economy in Serbia, Romania, Bulgaria, and Croatia approximates to slightly under or slightly over 30 percent. The analysis also reveals that the key driving causes of the informal economy in these countries are the regulation burden, level of corruption, the dominance of the agriculture sector, degree of urbanisation, macroeconomic developments and the size of the government. This research concludes with some recommendations

Mechanisms of Governance of Sustainable Development

In this paper we incorporate the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law, Sociology, Behavioral and Political Sciences), and suggest a framework for analyzing the mechanisms of governance of sustainable development. The agricultural sector is used to illustrate the approach, test the framework, and support with examples. Firstly, we discuss the modern concepts and the economics of sustainability. Secondly, we present a new framework for analysis and improvement of the governance of sustainable development. This new approach takes into account the role of specific institutional environment; and the behavioral characteristics of individual agents; and the transaction costs associated with the various forms of governance; and the critical factors of economic activity and exchanges; and the comparative efficiency of market, private, public and hybrid modes; and the potential of production structures for adaptation; and the comparative efficiency of alternative modes for public intervention. Finally, we identify specific modes for environmental governance in Bulgarian agriculture; and access the efficiency of market, private and public modes; and estimate the prospects for evolution of environmental governance in the conditions of EU CAP implementation. Agrarian development is associated with specific (different from other European states) environmental challenges such as degradation and contamination of farmland, pollution of surface and ground waters, loss of biodiversity, significant greenhouse gas emissions etc. That is a result of the specific institutional and governing structure evolving in the sector during the past 20 years. Implementation of the common EU policies will have unlike results in “Bulgarian” conditions enlarging income, technological, social and environmental discrepancy between different farms, sub-sectors and regions. Dominating subsistence farming, production cooperatives, small-scale commercial farms, and large business firms will be highly sustainable in years to come.mechanisms of governance; sustainable development; institutions, market, private, public and hybrid modes of governance; transaction costs; agrarian sustainability; environmental governance; Bulgaria

Formalizing the Shadow Economy in Serbia: Policy Measures and Growth Effects

Economic Policy; Public Economics; Economic Growth; Econometrics; Development Economics; Macroeconomics/Monetary Economics//Financial Economic

Accelerating the delivery of climate targets: Technology and behaviour in the road to net zero

Governments have known for more than half a century that emitting greenhouse gases increases temperatures and puts lives at risk. Yet global mitigation is minimal, for all the feted net zero commitments: emissions from fossil fuels have risen in every decade since records began. Some countries have made progress, including the United Kingdom where emissions have halved since 1990. But progress has so far relied on low-hanging fruit---the closure of coal mines; offshoring of industry; the recent growth of wind power. Future decarbonisation will be more challenging. Interdisciplinary collaboration, between scientists, engineers and economists among others, is necessary to overcome our carbon addiction. This thesis asks how best to achieve urgent mitigation. It focuses on public policy as a lever for decarbonisation; governments' cross-sectoral influence authority to enforce give them unique power to accelerate change. Research is undertaken in three parts. The first part considers the political economy of slow mitigation. It considers how political institutions and public beliefs affect the urgency of decarbonisation. Climate action faces opposition from incumbents and vested interests. This has led to a culture of myopic climate policy, defined as a high long- to short-term mitigation ratio. Every year mitigation is delayed makes it harder to achieve in future, transferring the burden from today's citizens to the future's. Moreover, public views over the issue salience of climate policy are lower than scientists', implying biased voter beliefs that impede adoption of the urgent policies needed to create near-term mitigation. This thesis postulates that policy myopia and biased beliefs can be ameliorated by setting a binding target on cumulative emissions, known as a carbon stock budget. For politicians, a carbon stock budget is an effective commitment mechanism. For the public, carbon stock framing alludes to threshold risks and appeals to the concept of household budgeting, both of which increase support for urgent policy. An economic model is presented that compares outcomes under a carbon stock budget and incremental climate policy. Results show that a budget increases nominal output by 40% in 2100. Implementing a carbon stock budget would help overcome barriers to meaningful decarbonisation. Mitigation can be achieved with new technologies, new behaviours or a combination of both. The second part of this thesis asks what history can teach us about technological and social transitions. Researchers have previously analysed past energy transitions, but no studies have yet reviewed social transitions for clues about future decarbonisation. Here, five large-scale energy and seven social transitions are assessed in detail. Historical reviews are combined with metrics on transition progress. Results show that all transitions go through common stages and face similar challenges and opportunities. These are summarised in two transition frameworks, which enable measurement of the duration and scale of each transition. Technological transitions tend to be slower than their social counterparts, and delays between conception and growth are four decades longer for new technologies. Uptake also tends to be slower: technologies averaged an annual growth rate of 1.6%, versus 4% for social transitions. History suggests that social change could play an important role in achieving net zero by 2050. The final part of this thesis asks what current climate strategies imply for the UK's timeline to net zero. It considers decarbonisation through the lens of disruption. A novel metric is proposed, which quantifies technological and behavioural disruption by measuring the implied change in a market or activity. A review of twelve proposed decarbonisation strategies yields 98 mitigation options and 538 distinct proposals. Applying the novel metric to these proposals reveals a bias towards technological mitigation. Two thirds of mitigation options rely solely on new technologies, one fifth rely on behavioural change, the remainder on a mix of both. Given the evidence that technological change can be slower than social change, these results suggest that the prevailing technological bias may impede near-term mitigation in the UK. This research contributes to a growing discussion of alternative approaches to net zero. It supports a new climate narrative: one in which policymakers can overcome political barriers to ambitious, near-term action, by reframing climate targets and matching technological deployment with effective behaviour change. The fundamental contributions of this thesis are threefold. It postulates a political argument for a carbon stock budget by linking theories of myopic policy and biased voting. It develops a new method to compare the pace of social and technological transitions, and illustrates the relative promise of social change. Finally, it proposes a novel metric to capture disruption in decarbonisation strategies and shows that proposals for the UK are technologically biased. Governments across the globe have pledged to reach net zero emissions by 2050. To live up to these promises, they must create change in the present by matching investment in prospective technologies with policies that utilise existing technologies and behavioural change. Accelerating the delivery of climate targets will require a balanced transition that places urgency at the heart of climate policymaking

Public expenditure and growth

Given that public spending will have a positive impact on GDP if the benefits exceed the marginal cost of public funds, the present paper deals with measuring costs and benefits of public spending. The paper discusses one cost seldom considered in the literature and in policy debates, namely, the volatility derived from additional public spending. The paper identifies a relationship between public spending volatility and consumption volatility, which implies a direct welfare loss to society. This loss is substantial in developing countries, estimated at 8 percent of consumption. If welfare losses due to volatility are this sizeable, then measuring the benefits of public spending is critical. Gauging benefits based on macro aggregate data requires three caveats: a) considering of the impact of the funding (taxation) required for the additional public spending; b) differentiating between investment and capital formation; c) allowing for heterogeneous response of output to different types of capital and differences in network development. It is essential to go beyond country-specificity to project-level evaluation of the benefits and costs of public projects. From the micro viewpoint, the rate of return of a project must exceed the marginal cost of public funds, determined by tax levels and structure. Credible evaluations require microeconomic evidence and careful specification of counterfactuals. On this, the impact evaluation literature and methods play a critical role. From individual project evaluation, the analyst must contemplate the general equilibrium impacts. In general, the paper advocates for project evaluation as a central piece of any development platform. By increasing the efficiency of public spending, the government can permanently increase the rate of productivity growth and, hence, affect the growth rate of GDP.Public Sector Economics&Finance,,Economic Theory&Research,Debt Markets,Public Sector Expenditure Analysis&Management

The basic homework on basic income grants

It is important to stress that this paper's aim is not to argue substantively against a basic income grant policy. Rather, it proposes that the necessary homework has to be identified first; then appropriate research conducted as the second step; before, thirdly, any policy advocacy is justified. This paper aims at the first task, to raise the questions judged still outstanding.