Options for Regional Decision Making in Metro Atlanta

Who loses if nothing is done? The city of Atlanta, with its central location, mature transit network, excess capacity in utilities, and reasonably aggressive public officials will probably thrive no matter what happens outside the I-285 perimeter. Communities outside the boundaries of the ten-county Atlanta Regional Commission (ARC) area will enjoy the temporary fruits of being the next ring of new suburban development. Caught between the Atlanta magnet and the sprawling communities outside the ARC, ARC's suburban communities may bear the worst of the downside effects of the current regional decision-making structure. In the end, though, it is all of North Georgia that loses as congestion, pollution, rising taxes, and reduced quality of life diminish its attractiveness to economic development

The Economics of Corporate Executive Pay

[Excerpt] In the past ten years, the pay of chief executive officers (CEOs) has more than doubled, and the ratio of median CEO to worker pay has risen to 179 to 1. High and rising executive pay could be an issue of public concern on two different grounds. First, it is contributing to widening income inequality that may be of concern from an equity perspective. Second, it could be the result of economically inefficient labor markets. It is difficult to determine whether executive pay is excessive across the board since executives’ marginal product cannot be directly observed. An upward trend in pay over time is not sufficient proof that the market is not efficient since factors determining supply and demand, such as the skills required of the position, can change over time. To show that pay is excessive from an economic perspective, one must first demonstrate that there is a market failure that is preventing the market from functioning efficiently. The market failure could originate in the division in large modern firms between management and ownership, which is typically dispersed among millions of shareholders. Shareholders’ interests are represented by a board of directors. Critics of executive pay have argued that boards have all too often been “captured” by the executive and are no longer negotiating pay packages that are in the shareholders’ best interests. They point to a number of common practices that they call “stealth compensation” which are inconsistent with arm’s length contracting. These include “golden parachutes,” generous severance packages, company-provided perks, and bonuses that are unrelated to firm performance. Stock options have been the fastest growing portion of executive pay since the 1990s, and critics believe this pattern can also be explained through the prism of stealth compensation. Rewarding executives with employee stock options was often justified in terms of the “pay for performance” mantra, but options are usually designed to reward absolute, not relative, performance. This means that in the bull market of the 1990s, when virtually all stock prices were rising, a company could fall behind its competitors and its executives could still receive handsome options payouts. Indeed, a sizeable portion of the increase in executive pay in the 1990s was likely due to options that turned out to be much more valuable than expected because of the unprecedented price increases of the bull market. Many of the recent corporate scandals appear consistent with stealth compensation as well. Stock options backdating, earnings manipulation, and accounting fraud might have been motivated by attempts to covertly increase executive pay. If short-term fluctuations in the stock price are not good proxies of firm performance, then tying compensation to the stock price can create incentives for executives to engage in activities that are detrimental to shareholders. Policy proposals mostly focus on improving transparency, increasing board independence, and strengthening shareholder control rather than attempting to curb pay directly. S. 1181 (Obama) and H.R. 1257 (Frank), which the House approved on April 19, 2007, would give shareholders a non-binding vote on executive pay. Another proposal would modify the limit on deductibility of executive pay from corporate taxation. More broadly, income inequality could be reduced by increasing the progressivity of the tax system. For current developments and legislation, see CRS Report RS22604, Excessive CEO Pay: Background and Policy Approaches

Soil biodiversity: functions, threats and tools for policy makers

Human societies rely on the vast diversity of benefits provided by nature, such as food, fibres, construction materials, clean water, clean air and climate regulation. All the elements required for these ecosystem services depend on soil, and soil biodiversity is the driving force behind their regulation. With 2010 being the international year of biodiversity and with the growing attention in Europe on the importance of soils to remain healthy and capable of supporting human activities sustainably, now is the perfect time to raise awareness on preserving soil biodiversity. The objective of this report is to review the state of knowledge of soil biodiversity, its functions, its contribution to ecosystem services and its relevance for the sustainability of human society. In line with the definition of biodiversity given in the 1992 Rio de Janeiro Convention, soil biodiversity can be defined as the variation in soil life, from genes to communities, and the variation in soil habitats, from micro-aggregates to entire landscapes. Bio Intelligence Service, IRD, and NIOO, Report for European Commission (DG Environment