Liberalizing air cargo services in APEC

This study aims at assessing the link between a more liberal air cargo regime and increased bilateral merchandise trade in the Asia Pacific region, under the auspices of APEC. Using the gravity model and employing the Air Liberalisation Index (ALI) developed by the WTO Secretariat, this paper finds strong support for two hypotheses. First, more liberal air services policies are positively, significantly and robustly associated with higher bilateral trade in merchandise. The results also show that air transport policy matters more for some sectors than for others. A particularly strong relationship is found between bilateral liberalisation and trade in manufactured goods, time sensitive products, and parts and components. Considering the sector found to be most sensitive to the degree of aviation liberalisation, the estimates imply that a one point increase in the ALI is associated with an increase of 4% in bilateral parts and components trade, prior to taking account of general equilibrium effects. These findings have important policy implications. In particular, economies actively seeking greater integration in international production networks could greatly benefit from a more liberal aviation policy regime.Aviation; international trade in services; liberalization; international trade in goods; parts and components trade; production networks; APEC.

Inequality and guard labor, or prohibition and guard labor?

In this paper, we consider whether or not inequality forces society to expend more resources on supervision which imposes an extra cost to doing business. Some argue that since inequality deteriorates social capital, there is a greater need for supervisory labor which is a costly burden to bear. We propose an alternative (but not mutually exclusive) explanation. We argue that the war on drugs leads to institutional decay and lower levels of trust which, in turn, force private actors to deploy resources to supervise workers and protect themselves. Our explanation complements the argument regarding the link between inequality and guard labor

Malthusian pressures : empirical evidence from a frontier economy

In this paper we study Malthusian pressures in a frontier economy. Using the empirical data on the real prices and demographic variables from 1688 to 1860 for Quebec and Montreal, we test for the existence of Malthusian pressures. Bearing in mind the particularities of frontier economies and the development of the Canadian economy, we conduct cointegration tests and VARs in order to identify positive and preventive checks. The cointegration test reveals absence of long-run equilibrium relationship between real wheat prices, birth and death rates. Using the Bai-Perron test we find a structural break in 1767 and divide the sample in pre- and post-conquest periods. We find that the positive checks were operating in the years prior to the conquest but that they faded during the nineteenth century. In the short-run, we find that wheat prices Granger-cause fluctuations in death rates in the pre-conquest period

Who are the champions? Inequality, economic freedom and the olympics

Does a countrys level of inequality affect its ability to win Olympic medals? If it does, is it conditional on institutional factors? We argue that the ability of economically free societies to win medals will not be affected by inequality. In these societies, institutions generate incentives to invest in the talent pool of individuals at the bottom of the income distribution (people who are otherwise constrained in the ability to expend resources on athletic training). These effects cancel out those of inequality. In unfree societies, the incentives that promote investments in skills across the income distribution are weaker. Consequently, the effects of inequality on the ability to win are stronger. Using the Olympics of 2012 and 2016 in combination with the Economic Freedom of the World Index, we find that inequality only matters in determining medal numbers for unfree countries. We link these results to the debates on inequality

Demographic change and regional convergence in Canada

We examine the role of demographic change for regional convergence in living standards in Canada. Due to economies of scale within a family, decreasing household size has an impact on convergence in living standards, while per capita income convergence remains unaffected. We find that, by relying on per capita income, the dispersion of living standards between Canadian regions is overestimated prior to the 1990s and underestimated thereafter. As a consequence, relying on income per capita results in overestimating the speed of convergence in living standards

Living standards in lower Canada, 1831

This paper uses the price and wage data contained in the 1831 census of Lower Canada to provide regional estimates of disparities in living standards within Quebec in 1831. Combining these data with price data for the colony as a whole, we compare living standards in Quebec with those of numerous American and Canadian cities at the same point in time. The results show that Quebec was overall poorer in comparison. However, there are wide variations within the colonymostly along institutional lines. As a whole, Quebec was significantly poorer than the United States at the same time

Infant mortality and the role of seigneurial tenure in Canada East, 1851

This paper aims to explain differences in infant mortality across the colony of Quebec, known in the 1850s as Canada East, by institutional settings. Areas settled under French laws (known as seigneurial law) implied important transfers from peasants to landlords through private taxes and duties, restrictions on mobility, scant provision of public goods and disincentives to invest in agricultural productivity. As a result, areas under this law system tended to be poor and prone to high mortality. Upon conquering Quebec, the British maintained French land laws but, in 1791, the boundaries of its application were frozen all newly settled lands would be under British land laws. By 1851, the two legal systems had cohabited for six decades allowing us to compare them. Using the 1851 census, we argue that French seigneurial law which reduced living standards through a variety of channels translated into higher rates of infant mortality. After estimating a Zero-inflated Negative Binomial Regression we find that the effect of seigneurial tenure results in an increase in infant death rates from 43.79 to 44.89 for the age group below one and from 5.21 to 5.277 for the age group from one to five. Additionally, we conduct robustness checks by limiting the sample to large settlements and changing the age groups for the dependent variable

Infant mortality and the role of seigneurial tenure in Canada East, 1851

This paper aims to explain differences in infant mortality across the colony of Quebec, known in the 1850s as Canada East, by institutional settings. Areas settled under French laws (known as seigneurial law) implied important transfers from peasants to landlords through private taxes and duties, restrictions on mobility, scant provision of public goods and disincentives to invest in agricultural productivity. As a result, areas under this law system tended to be poor and prone to high mortality. Upon conquering Quebec, the British maintained French land laws but, in 1791, the boundaries of its application were frozen all newly settled lands would be under British land laws. By 1851, the two legal systems had cohabited for six decades allowing us to compare them. Using the 1851 census, we argue that French seigneurial law which reduced living standards through a variety of channels translated into higher rates of infant mortality. After estimating a Zero-inflated Negative Binomial Regression we find that the effect of seigneurial tenure results in an increase in infant death rates from 43.79 to 44.89 for the age group below one and from 5.21 to 5.277 for the age group from one to five. Additionally, we conduct robustness checks by limiting the sample to large settlements and changing the age groups for the dependent variable

Monopsony and industrial development in nineteenth century Quebec : the impact of seigneurial tenure

We argue that the system of seigneurial tenure used in the province of Quebec until the mid-nineteenth centurya system which allowed significant market power in the establishment of plants, factories and mills, combined with restrictions on the mobility of the labor force within each seigneurial estateis best understood as a system of regionalized monopsonies in the non-farm sector. Seigneurs had incentives to reduce their employment in those sectors to reduce wage rates. We use the fact that later, with the Constitutional Act of 1791, all new settled lands had to be settled under a different system (British land laws). This natural experiment allows us to test our hypothesis that seigneurial tenure was a monopsony, using data from the 1831 and 1851 Lower Canada censuses. We find strong evidence that this difference in tenure partially explains the gap in industrial development between Quebec and the neighboring colony of Ontario

Continuity under a different name, the outcome of privatisation in Serbia

Normally, privatisation is seen as beneficial. In the case of Serbia, the results are disappointing. This paper considers the failure of privatisation in Serbia a latecomer in the matter where privatisation was partly a result of exogenous pressures. In Serbia, a sizeable number of privatised firms were bought by bureaucrats and politicians and all firms were subjected to a period of supervision. We argue that this process of privatisation was designed to allow rentseekers to conserve their privileges through asset stripping and that this explains the failure. In order to do so, we perform empirical analysis of the determinants of liquidation, merger and bankruptcy of privatised firms from 2002 to 2015. We construct a novel data set from primary sources, free of the survivorship bias and containing proxies for various types of owners, indirect signs of asset stripping strategy and a broad range of controls. Our results indicate that firms owned by politicians face significantly higher risks of bankruptcy, especially after the end of supervision