Efficiency and equity in social spending : how and why governments misbehave

A hot issue in development economics is how much to rely on user charges and private organizations to provide such social services as health and education. Most analysts arguing on either side of the issue assume that any policy decisions involve a tradeoff between equity and efficiency. The authors argument is that in many settings in the developing world that assumption is incorrect. In many countries, they argue, the current situation is inefficient partly because it is inequitable; more equitable social spending would be more efficient in reducing mortality, for example, or in maximizing social returns to spending on education. The model they use assumes that the degree of efficiency and redistribution is endogenous, so the real problem is : how does one break into the chain of causes and bring about a new, more efficient and equitable equilibrium? The authors argue for a policy that concentrates government funding on public goods and encourages the market to do what it does best : fund and produce private goods. They recommend ten political strategies for reallocating government funds in the public sector in a way that maximizes the benefits of targeting, reduces costs, and minimizes resistance to change and the withdrawal of the middle and upper classes'political and tax support.Economic Theory&Research,Environmental Economics&Policies,Health Monitoring&Evaluation,Public Sector Economics&Finance,Health Economics&Finance

Health, government, and the poor : the case for the private sector

The authors present a case for user charges and some privatization of health care in developing countries. They demonstrate that - consistent with public choice theory - government actions in the health sector are neither equitable nor efficient in developing countries. In general, they increase the real income of influential middle and upper income groups - despite the fact that the greatest mortality gains would come from directing health spending to the poor. They discuss why government health interventions will become less effective than they have been. They point out that high mortality in developing countries is related more to poverty than it used to be, while pressure on governments to finance health care for the middle class and the rich is increasing because the population is aging and the costs of handling adult chronic diseases are rising. The inequity and inefficiency of government health programs reflect the current political equilibrium which, unfortunately, cannot be easily changed. Opportunities for change, including marginal changes in the distribution of political power, must be recognized and exploited whenever they arise. Information that increases public awareness of current inequities, fiscal stress, and tactical use of newly available resources may also create opportunities to alter the equilibrium.Health Systems Development&Reform,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Health Monitoring&Evaluation,Health Economics&Finance

Ramanujan and the Regular Continued Fraction Expansion of Real Numbers

In some recent papers, the authors considered regular continued fractions of the form $$[a_{0};\underbrace{a,...,a}_{m}, \underbrace{a^{2},...,a^{2}}_{m}, \underbrace{a^{3},...,a^{3}}_{m}, ... ],$$ where $a_{0} \geq 0$, $a \geq 2$ and $m \geq 1$ are integers. The limits of such continued fractions, for general $a$ and in the cases $m=1$ and $m=2$, were given as ratios of certain infinite series. However, these formulae can be derived from known facts about two continued fractions of Ramanujan. Motivated by these observations, we give alternative proofs of the results of the previous authors for the cases $m=1$ and $m=2$ and also use known results about other $q$-continued fractions investigated by Ramanujan to derive the limits of other infinite families of regular continued fractions.Comment: 14 page

1999 ANNUAL AGRICULTURAL OUTLOOK

Compilation of 1999 outlook articles written by faculty in the Department of Agricultural Economics at Michigan State University covering issues such as the economy, farm policy, commodity prices and production, farm income, and farm input supplies.Farm Management,

ANNUAL AGRICULTURAL OUTLOOK

Farm Management,

ANNUAL AGRICULTURAL OUTLOOK

Agribusiness,

Behavioral Modeling and Fisheries Management

Because of the extreme uncertainty in fisheries biology, efforts to determine a stock-recruitment relationship have not been entirely successful. In the face of this certainty, this paper argues for a change in focus for fisheries economics from bioeconomic optimization toward goals which are more modest and more easily achievable. In particular, a satisficing approach to management is advocated, whereby efforts are made to reallocate some porportion of effort from overutilized to underutilized fisheries, with no attempt to determine the optimum. In order to achieve such a solution efficiently, managers must accurately predict the response of fishermen to public policy. This paper reports on a study which develops a discrete choice model to predict fishermen's supply response. Fishermen are shown to respond to economic incentives of expected returns and variability of returns, but only after these incentives surpass a substantial threshold.Institutional and Behavioral Economics,