Knowledge, Coordination, and Fiscal Federalism: An Organizational Perspective

This essay brings fiscal federalism theory into contact with the knowledge perspective to economic organization. The question addressed is: can a central government be justified in the context of fiscal federalism on grounds of economic organization? We point out that if one looks at the organizational problem of the vertical structure of the public sector from the standpoint of knowledge asymmetry the question of a central government in a federation becomes primarily a story of coordination of dispersed and specific knowledge.Federalism, economic organization, information asymmetry, knowledge asymmetry, coordination, EU.

Open Source Software and Economic Growth: A Classical Division of Labor Perspective

The article turns to classical economic insights on the division of labor and to institutional reasoning to identify some costs and benefits of Open Source Software (OSS) and proprietary software production. It suggests that, thanks to its licenses, OSS favors market expansion more than proprietary software does by tapping into spontaneous work input. The spontaneous tapping leads to a division of labor that exhibits what the article calls redundant economies. By generating a circle of knowledge growth, reuse, and sharing, redundant economies lead to increasing returns, which are crucial for economic growth

The components of output growth: A stochastic frontier analysis

This dissertation looks at cross-country patterns of economic and productivity growth. In particular, I look at the components of output growth in 5 groups of countries: Africa, Latin America, East Asia, South Asia and West and over the thirty year period 1960–89. The main objective of this dissertation is to determine the relative importance of TFP versus capital accumulation in the growth process of these regions. ^ The major obstacle to the previous growth studies is the lack of data on physical capital stock, especially for developing countries. To allow the inclusion of a larger number of developing countries, this dissertation calculates a physical capital stock series for 104 countries and over the entire period. One assumption made by most empirical studies of growth is that capital and labor are homogenous across countries and time. I argue that this is an extreme assumption and I include variables that capture differences in input composition and may affect the productivity of capital and labor. I use the mean years of education as a proxy for the quality of labor and the average age of capital as a proxy for the quality of the physical capital stock. Consequently, this dissertation also calculates the average age of physical capital for each country and for every year. ^ I adopt a stochastic frontier analysis to decompose TFP growth into efficiency change and technological change. In the case with qualitative variables, TFP is further decomposed into quality change. The main findings are that the average age of physical capital has a negative effect on output growth while results on education are less conclusive. Output decomposition shows that in both models with and without qualitative variables, it is capital accumulation rather than TFP that explains most of output growth.

Knowledge, coordination, and fiscal federalism: an organizational perspective

This essay brings fiscal federalism theory into contact with the knowledge perspective to economic organization. The question addressed is: can a central government be justified in the context of fiscal federalism on grounds of economic organization? We point out that if one looks at the organizational problem of the vertical structure of the public sector from the standpoint of knowledge asymmetry the question of a central government in a federation becomes primarily a story of coordination of dispersed and specific knowledge

Coordination, knowledge, and supranational federalism: an organizational perspective

Fiscal federalism theory has begun to endogenize the insights of modern organizational economics, especially those of agency and transaction-cost approaches. We follow the lead by endogenizing knowledge-based theories too. We show how the theoretical forerunners of local public finance recognized, if in different degrees, the knowledge perspective. We stress that the distribution of dispersed knowledge is the unknown rather than the given variable. Whence our central conclusion: knowledge coordination is generally more important than incentive or transaction-cost coordination. This conclusion yields new implications about the vertical organization of the public sector – hence about welfare. Our concrete illustration is supranational federalism

Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement

This paper examines cross-country patterns of economic growth by estimating a stochastic frontier production function for 80 developed and developing countries and decomposing output change into factor accumulation, total factor productivity growth, and production efficiency improvement. In addition, this paper incorporates the quality of inputs in analyzing output growth, where the productivity of capital depends on its average age, while the productivity of labor depends on its average level of education. Our growth decomposition involves five geographic regions - Africa, East Asian, Latin America, South Asia, and the West. Factor growth, especially capital accumulation, generally proves much more important than either the improved quality of factors or total factor productivity growth in explaining output growth. The quality of capital positively and significantly affects output growth in all groups. The quality of labor, however, only possesses a positive and significant effect on output growth in Africa, East Asia, and the West. Labor quality owns a negative and significant effect in Latin America and South Asia

Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement

This paper examines cross-country patterns of economic growth by estimating a stochastic frontier production function for 80 developed and developing countries and decomposing output change into factor accumulation, total factor productivity growth, and production efficiency improvement. In addition, this paper incorporates the quality of inputs in analyzing output growth, where the productivity of capital depends on its average age, while the productivity of labor depends on its average level of education. Our growth decomposition involves five geographic regions - Africa, East Asian, Latin America, South Asia, and the West. Factor growth, especially capital accumulation, generally proves much more important than either the improved quality of factors or total factor productivity growth in explaining output growth. The quality of capital positively and significantly affects output growth in all groups. The quality of labor, however, only possesses a positive and significant effect on output growth in Africa, East Asia, and the West. Labor quality owns a negative and significant effect in Latin America and South Asia.Productivity; Efficiency; Growth Accounting