Academia in Anarchy: 50 Years On

In 1970, James Buchanan and Nicos Devletoglou published Academia in Anarchy: An Economic Diagnosis. Even though the book focuses on the industry Buchanan worked in for nearly 70 years, it is the only one of his non-autobiographical, non-textbook, books not included in his collected works. I evaluate the arguments of Buchanan and Devletoglou in light of the past 50 years of scholarship on the economics of higher education

Estimating the size of the trade sector in the Economic Freedom of the World index

The Economic Freedom of the World (EFW) index measures the extent to which nations allow their citizens economic freedom. The freedom of people to trade internationally is a featured area within the index. One component of this area is the size of the trade sector, or rather the deviation of a country's trade sector from its expected size. This note explains the basic methodology used to estimate the model and create the ratings for the deviation of a country's trade sector from its expected size component of the EFW index.trade sector, economic freedom, distance-adjusted demand

Economic Activity, International Intervention, and Transitional Governance: A Comparative Case Study of Somalia

This paper investigates the impact of international state-building efforts in Somalia on economic development. We use satellite data on night lights to measure economic activity to deal with nonexistent or poor-quality national income accounts. Using the synthetic control method, we find that the establishment of the Transitional Federal Government in 2004 was associated with economic stagnation relative to the years under statelessness. Using nighttime light emissions, we find economic stagnation regardless of whether we use the total lights emitted from the country or the spread of lights across the country. Our empirical findings are consistent with the idea that the exogenously imposed Transitional Federal Government destabilized the country through an incongruity with the informal institutions that had led to development during Somalia\u27s `statelessness.\u2

Growth And Variability Of School District Income Tax Revenues: Is Tax Base Diversification A Good Idea For School Financing?

Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/145497/1/coep12276_am.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/145497/2/coep12276.pd

The Effect of Transparency, Independence and Accountability of Central Banks on Disinflation Costs

Policymakers often want to achieve low inflation to avoid the low economic growth associated with high inflation. Reducing inflation through monetary policy (disinflation) is not costless as it can coincide with higher unemployment rates and reduced output. In this paper we use sacrifice ratios to calculate the cost of disinflation during the 1990s for 40 countries. We then study whether transparency and democratic accountability of monetary institutions reduces disinflation costs. Our empirical results suggest that more transparent central banks seem to face higher disinflation costs. This result could be because more transparent central banks have lower initial inflation rates during their disinflation episodes. Therefore, reducing inflation even further is more costly to them. We find no significant relationship between independence of central banks and the disinflation costs they faced during 1990s

Keeping College Pricey: The Bootlegger and Baptist Story of Higher Education Accreditation

Since the passage of the Veterans Readjustment Act of 1952, private accrediting agencies have held the purse strings to all federal student aid. Today, six regional accrediting agencies and ten national accrediting agencies act as the gatekeepers of these federal monies. No college or university can access federal funds without receiving the imprimatur of one of these recognized accrediting agencies. Proponents of the current system of accreditation argue that the framework presently in place ultimately benefits both students and the public at large by fulfilling quality assurance and information signaling functions. Applying Yandle’s “Baptists and Bootleggers” model, we examine whether the accreditation system in this country exclusively serves the public interest by ensuring that institutions are meeting high standards of excellence or whether this system instead serves private interests. We begin by briefly outlining the history of accreditation in the United States before explaining the public choice lens through which we explore the issue of higher education accreditation—Yandle’s Baptists and Bootleggers model. After highlighting the public interest (“Baptist”) arguments many policy advocates have raised in favor of accreditation, we consider whether the quantitative and the qualitative evidence supports the public interest story. We then turn to the public choice (“Bootleggers”) account of the current accreditation system and argue that the current system of higher education accreditation serves as a cartel aimed at keeping the price of a college education high, with little incentives for anything beyond minimum quality standards. We test this hypothesis by analyzing the opposition raised by universities and accrediting agencies alike to 34 C.F.R.§ 600.9—a regulation promulgated in October 2010 dealing with the state’s power to deny federal funds to schools that fail to meet its independent authorization requirements, even if the school is already accredited by one of the recognized accrediting agencies. We suggest that the current system of compulsory accreditation should be abolished and should be replaced by a system run independently by each state. Ultimately, competition between the states both for students and for new and innovative universities would result in reforms that the accreditors have no incentive to pursue under the current system