Protestant Ethic, Status Seeking, and Economic Growth

Commodities do not only serve the purpose of satisfying direct needs in the production and con-sumption process. Some of them can also be used to display social status and to affect the position of an individual in society. This paper addresses the question under which circum-stances status-seeking behaviour may lead to permanent economic growth in a simple model. The protestant ethic is interpreted as a special case of status-seeking behaviour. It is shown that societies composed of status-seeking individuals may grow faster than less status-oriented societies.Protestant ethic, social status, economic growth

Interjurisdictional competition and the efficiency of the public sector: The triumph of the market over the state?

It has been argued in the literature that, interjurisdictional competition forces the public sector to increase its efficiency and thus helps to tame Leviathan governments. The paper addresses this hypothesis by means of a simple taxcompetition model with a Leviathan state. It is seen that the effects of increased factor mobility on the efficiency of the public sector are ambiguous. A calibration of the model shows that a reduction in public-sector efficiency is possible for parameter constellations which are not unrealistic.

Concentration, Separation, and Dispersion: Economic Geography and the Environment

The paper investigates the spatial patterns of industrial location and environmental pollution in a new-economic-geography model. Factors of production and their owners are mobile, but factor owners are not required to live in the region in which their factors are employed. Under laisser-faire, a chase-and-flee cycle of location is possible: people, who prefer a clean environment, are chased by polluting industries, which want to locate geographically close to the market. Locational patterns under optimal environmental regulation include concentration, separation, dispersion and several intermediate patterns. Moreover, it is shown that marginal changes in environmental policy may induce discrete changes in locational patterns.economic geography, migration, trade, pollution, environmental regulation

On ecological dumping

Ecological dumping is a catchword used in the public discussion on environmental policies in open economies to characterize situations in which a country uses a too-lax environmental legislation as an instrument of achieving trade-related economic policy goals. The paper first tries to define ecological dumping and then looks at economic motives underlying this kind of environmental policy. The approaches considered in this paper are the terms-of-trade argument, strategic trade policy and a public choice model in which the government either maximizes tax revenues or supports sector-specific interest groups.

Green R&D versus End-of-Pipe Emission Abatement: A Model of Directed Technical Change

The paper looks at a model of directed technical change in an environmental-economics context. Firms can do conventional or "green" R&D or they can abate emissions at the end of pipe. The paper has two main foci. On the one hand, it investigates the impact of environmental regulation on the allocation of resources to conventional R&D, green R&D, and end- of-pipe abatement. On the other hand, it addresses the question whether stricter emission standards should be used to support green R&D and/or economic growth.economic growth and the environment, directed technical change

Sustainable Development and Complex Ecosystems. An Economist's View

The paper surveys economic aspects of sustainability and the use of complex ecological systems. In a first step, an economist's view of the concept of sustainability is presented. Then, a simple model of the economic use of a dynamic ecological system is discussed. It is shown how economically optimal trajectories look like, in which circumstances it may be optimal to destroy the ecosystem, and which problems arise if this ecosystem is a common-property resource. Extensions of the model that add complexity and uncertainty are referred to briefly. Finally, some economic concepts to determine the value of ecosystems are presented.

Tax Competition, Capital Mobility, and Innovation in the Public Sector

The paper analyses the impact of tax competition on innovation in the public sector. It is shown that the effects of increased mobility of the tax base on innovation and growth are ambiguous. The negative relationship is more likely, however. Moreover, it is shown that a Leviathan government may be induced to spend a larger share of its budget on unproductive activities.tax competition, economic growth, innovation, Leviathan competition, North-South model.

Voluntary Emission Reductions, Social Rewards, and Environmental Policy

Social norms and intrinsic motivations lead to environmentally friendly behaviour even in the absence of environmental policy. This paper looks at the interactions of social norms and environmental regulation in their impact on individual behaviour. People obtain social rewards for voluntary abatement efforts. These social rewards may be crowded out by environmental regulation taking the shape of standards or taxes. Moreover, the paper shows that environmental externalities and externalities related to social norms interact and that an optimal environmental policy should consider both types of externalities. From a general welfare point of view, emission taxes are superior to emission standards, but people responsive to social rewards prefer standards.

Environmental regulation and the location of polluting industries

Does international tax competition in the environmental field lead to undesirably low levels of environmental regulation and to unacceptable disruptions of environmental quality? The paper tries to answer this question in a non-competitive partial-equilibrium framework. There is one firm that wishes to establish a plant in one of n countries. The paper shows that tax competition may lead to emission taxes that are either too low or too high. They may be so high that the investment is not undertaken although this would be optimal if the countries cooperated. On the other end of the spectrum, a scenario in which taxes are driven to zero becomes possible if there are substantial transfrontier pollution effects.