Informal production and labour market segmentation

This is the author's final version of the article. The final publication is available from the link below. Copyright © 2011 Mohr Siebeck.An industry is modeled in which entrepreneurs, who are heterogeneous in ability, may produce formally or informally. Two cases are distinguished, with and without labour market segmentation, for which different patterns of formal/informal supply obtain. Without segmentation, informality may generate production where otherwise there would be none. Typically, however, a trade-off obtains: when informality makes output higher it cuts the profit of the most able entrepreneurs, potentially damaging growth. With segmentation, informality causes some replacement of ‘good’ jobs by ‘bad,’ and total employment may be affected in either direction; without segmentation the effect on total employment is weakly positive

Corruption and bureaucratic structure in a developing economy

We address the impact of corruption in a developing economy in the context of an empirically relevant hold-up problem - when a foreign firm sinks an investment to provide infrastructure services. We focus on the structure of the economy’s bureaucracy, which can be centralized or decentralized, and characterize the ‘corruptibility’ of bureaucrats in each case. Results are explained in terms of the noninternalization, under decentralization, of the ‘bribe externality’ and the ‘price externality.’ In welfare terms, decentralization is favoured, relatively speaking, if the tax system is less inefficient, funding is less tight, bureaucrats are less venal, or compensation for expropriation is ungenerous

Broadcasting of three qubit entanglement via local copying and entanglement swapping

In this work,We investigate the problem of secretly broadcasting of three-qubit entangled state between two distant partners. The interesting feature of this problem is that starting from two particle entangled state shared between two distant partners we find that the action of local cloner on the qubits and the measurement on the machine state vector generates three-qubit entanglement between them. The broadcasting of entanglement is made secret by sending the measurement result secretly using cryptographic scheme based on orthogonal states. Further we show that this idea can be extended to generate three particle entangled state between three distant partners.Comment: 18 pages, 4 figures, Accepted in Physical Review

Regulatory barriers and entry in developing economies

We model entry by entrepreneurs into new markets in developing economies with regulatory barriers in the form of licence fees and bureaucratic delay. Because laissez faire leads to ‘excessive’ entry, a licence fee can increase welfare by discouraging entry. However, in the presence of a licence fee, bureaucratic delay creates a strategic opportunity, which can result in both greater entry by first movers and a higher steady-state number of firms. Delay also leads to speculation, with entrepreneurs taking out licences to obtain the option of immediate entry if they later observe the industry to be profitable enough

Self-employment, wage employment and informality in a developing economy

This article has been made available through the Brunel Open Access Publishing Fund.We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies, and we give a diagrammatic formulation of the market equilibrium. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment, and wage employment. We then introduce labour market segmentation. In equilibrium voluntary and involuntary self-employment, formal and informal wage employment, and formal and informal entrepreneurship may all coexist. We illustrate the model by an example calibrated on Latin American data, examining individual labour market transitions and implications of education/training and labour market policies

Public Infrastructure, Congestion, and Fiscal Policy

A macro model is developed incorporating the productive e®ects of public expenditure, but also allowing for congestion. The Pigouvian tax rate to correct for the distortion caused by congestion is found and the optimal level of public expenditure is characterized