Growth and public infrastructure

The paper analyzes a multicountry extension of the Barro model of productive public expenditure. In the presence of positive infrastructural externalities between countries, the provision of infrastructure will be inefficiently low if countries do not coordinate. This provides a role for a supranational body, such as the European Union, to coordinate the policies of the individual governments. It is shown how intervention by a supranational body can raise welfare by internalizing the infrastructural externality. Infrastructural externalities increase the importance of tax policy in the growth process and distribute the benefits of taxation across countries

Tax fraud by firms and optimal auditing

Abstract Tax fraud is an issue of increasing importance in China. One particularly signi…cant fraud involves excessive claims for the rebate of VAT on exported goods. This fraud has two interesting features. First, it requires the collusion of an intermediary to supply the false documentation that supports a rebate application. Second, the punishment schedule is convex -with capital punishment used in major fraud cases. These features ensure that the payo¤ function of a …rm engaging in fraud is strictly concave in the level of fraud. This gives a well-de…ned optimization without the need to appeal to risk aversion. We show that the existence of fraud does not a¤ect the real output decision of the …rm nor the tax policy of the government. Audit resources can be used to detect …rms engaged in fraud as well as the intermediaries who supply false documents. Under reasonable assumptions it is shown that resources should be focused on detecting …rms and not intermediaries. Finally, if the government must take action on fraud a convex punishment scheme is shown to be optimal

Growth and Public Infrastructure

The paper analyzes a multi-country extension of the Barro model of productive public expenditure. In the presence of infrastructural externalities between countries the provision of infrastructure will be inefficiently low if countries do not coordinate. This provides a role for a supra-national body, such as the EU, to coordinate the policies of the individual governments. It is shown how the supranational body can ensure the efficient level of infrastructure provision and, as a result, obtain an increased rate of growth. The results of the paper also show how capital flows between countries act to equalize growth rates. This can help explain why there is limited empirical evidence for tax rates causing a difference in growth rates between countries. This is not the same as saying taxation does not affect growth: if production requires public infrastructure then taxation is needed for growth. The flow of capital acts to distribute the benefit of this across countries.

The Influence of Enterprise Systems on Business and Information Technology

Business strategy is important to all organizations. Nearly all Fortune 500 firms are implementing Enterprise Resource Planning (ERP) systems to improve the execution of their business strategy and to improve integration with its information technology (IT) strategy. Successful implementation of these multi-million dollar software systems are requiring new emphasis on change management and on Business and IT strategic alignment. This paper examines business and IT strategic alignment and seeks to explore whether an ERP implementation can drive business process reengineering and business and IT strategic alignment. An overview of business strategy and strategic alignment are followed by an analysis of ERP. The “As-Is/To-Be” process model is then presented and explained as a simple, but vital tool for improving business strategy, strategic alignment, and ERP implementation success

On the membership of decision making committees

Draft published as working paper in November 2000The decision of a committee is determined jointly by the votingprocess it adopts and the composition of its membership. The paper analyses the process through which committee members emerge from the eligiblepopulation and traces the consequences of this for the decisions ofthe committee. It is shown that the equilibrium committee will becomposed of representatives from the extremes of the tastedistribution. These extremes balance each other and the committeereaches a moderate decision. However, this mutual negation by theextremes is a socially wasteful use of time. Data from the UK Houseof Lords is used to illustrate these results

Structure of the optimal income tax in the quasi-linear model

Author's draft: final version appears in International Journal of Economic Theory Vol. 3, Issue 1, 2007, p. 5-33. Available online on http://www3.interscience.wiley.com/Existing numerical characterizations of the optimal income tax have been based on a limited number of model specifications. As a result, they do not reveal which properties are general. We determine the optimal tax in the quasi-linear model under weaker assumptions than have previously been used; in particular, we remove the assumption of a lower bound on the utility of zero consumption and the need to permit negative labor incomes. A Monte Carlo analysis is then conducted in which economies are selected at random and the optimal tax function constructed. The results show that in a significant proportion of economies the marginal tax rate rises at low skills and falls at high. The average tax rate is equally likely to rise or fall with skill at low skill levels, rises in the majority of cases in the centre of the skill range, and falls at high skills. These results are consistent across all the specifications we test. We then extend the analysis to show that these results also hold for Cobb-Douglas utility

The benefits of costly voting

Discussion paperWe present a costly voting model in which each voter has a private valuation for their preferred outcome of a vote. When there is a zero cost to voting, all voters vote and hence all values are counted equally regardless of how high they may be. By having a cost to voting, only those with high enough values would choose to incur this cost. Hence, the outcome will be determined by voters with higher valuations. We show that in such a case welfare may be enhanced. Such an effect occurs when there is both a large enough density of voters with low values and a high enough expected value

Experimental investigations of mixing characteristics in model rotating detonation engine geometries

This work examines the mechanisms of reactant mixing in a model Rotating Detonation Engine (RDE) geometry. RDEs are emerging as one of the highest potential applications for achieving Pressure Gain Combustion (PGC). Reactant mixing has been identified as a crucial component of efficient RDE operation. Therefore, a scaled model of a typical RDE engine geometry was examined in a water tunnel using Planar Laser Induced Fluorescence (PLIF) to observe the influence of fuel injection position, confinement geometry, and blowing ratio on the mixing characteristics and quality of mixing