Cost-Benefit Rules for Public Good Provision with Distortionary Taxation

The paper shows that a comparison of the appropriately-weighted sum of households’ marginal willingness to pay for a public good with the net effect of the increased supply of the public good on shadow, as distinct from actual, government revenue is a generally valid rule for public good provision. This rule does not depend on any assumption that existing policy is optimal. The practical problems in measuring the true social cost of additional public good provision involve the need to estimate shadow prices of non-traded goods and goods which are not traded at given world prices The marginal cost of public funds is not required in order to measure the social cost of public good provision.

Distortionary Domestic Taxation and Pareto-Efficient International Trade

This paper characterises the domestic tax systems which yield Pareto-efficient outcomes for a two-country world economy in which each country uses distortionary taxes. Such outcomes are compared with the Nash equilibria of the world economy when each country uses its domestic tax system to influence ist terms of trade. In such circumstances, the implementation of domestic tax systems which achieve a globally Pareto-efficient outcome as a Nash equilibrium will be very difficult, for two main reasons: the ability of countries to use tax policy with respect to non-traded goods for protection, and the fact that Pareto-efficient tax structures depend on countries‘ distributional judgements, which are hard to measure objectively.

Contract Enforcement, Institutions and Social Capital: the Maghribi Traders Reappraised

Economists draw important lessons for modern development from the medieval Maghribi traders who, according to Greif, enforced contracts multilaterally through a closed, private-order ‘coalition’. We show that this view is untenable. The Maghribis used formal legal mechanisms and entered business associations with non-Maghribis. Not a single empirical example adduced by Greif shows that any ‘coalition’ actually existed. The Maghribis cannot be used to argue that the social capital of exclusive networks will facilitate exchange in developing economies. Nor do they provide any support for the cultural theories of economic development and institutional change for which they have been mobilised.contract enforcement, reputation, legal system, social network

How Weak is the Weakest-Link Principle?On the Measurement of Firm Owners’Control Rights

The paper argues that the weakest link principle, which has been widely used as a measure of ultimate owners’ control rights, has a number of serious problems. A theoretically more satisfactory method of measuring control rights, based on voting power indices, is proposed, and the different measures are compared using a sample of large listed German firms. Thedifferent measures produce very different results. But, whichever measure is used, taking account of pyramid ownership structures has little effect on the values of control and cashflow rights. The results also show that neither first-tier nor ultimate control rights measures are adequate on their own, suggesting that further work on ownership structure and pyramids is required to obtain satisfactory measures of large owners’ control rights.corporate governance, control rights, weakest-link principle.

Ownership Concentration and Share Valuation: Evidence from Germany

Concentrated ownership of large listed companies is widespread throughout the world, and Germany is typical in this respect. This paper proposes a method of distinguishing empirically between the beneficial and harmful effects of ownership concentration, and applies it to German data. The results show that, for most types of largest shareholder, the beneficial effects on minority shareholders of increased ownership (greater monitoring of management, and reduced incentives to exploit minority shareholders due to greater cash-flow rights) outweigh the harmful effect (greater private benefits of control due to greater control rights).Ownership structure, firm performance

What Lessons for Economic Development Can We Draw from the Champagne Fairs?

The medieval Champagne fairs are widely used to draw lessons about the institutional basis for long-distance impersonal exchange. This paper re-examines the causes of the outstanding success of the Champagne fairs in mediating international trade, the timing and causes of the fairs’ decline, and the institutions for securing property rights and enforcing contracts at the fairs. It finds that contract enforcement at the fairs did not take the form of private-order or corporative mechanisms, but was provided by public institutions. More generally, the success and decline of the Champagne fairs depended crucially on the policies adopted by the public authorities.legal system, medieval Europe, trade, private-order institutions, community responsibility system

Characterization of mutations and loss of heterozygosity of p53 and K-\u3ci\u3eras\u3c/i\u3e2 in pancreatic cancer cell lines by immobilized polymerase chain reaction

Background The identification of known mutations in a cell population is important for clinical applications and basic cancer research. In this work an immobilized form of the polymerase chain reaction, referred to as polony technology, was used to detect mutations as well as gene deletions, resulting in loss of heterozygosity (LOH), in cancer cell lines. Specifically, the mutational hotspots in p53, namely codons 175, 245, 248, 249, 273, and 282, and K-ras2, codons 12, 13 and 61, were genotyped in the pancreatic cell line, Panc-1. In addition LOH analysis was also performed for these same two genes in Panc-1 by quantifying the relative gene copy number of p53 and K-ras2. Results Using polony technology, Panc-1 was determined to possess only one copy of p53, which possessed a mutation in codon 273, and two copies of K-ras2, one wildtype and one with a mutation in codon 12. To further demonstrate the general approach of this method, polonies were also used to detect K-ras2 mutations in the pancreatic cell lines, AsPc-1 and CAPAN-1. Conclusions In conclusion, we have developed an assay that can detect mutations in hotspots of p53 and K-ras2 as well as diagnose LOH in these same genes

Does culture cause economic development? A reassessment of the evidence from European regions

This paper shows that Tabellini's recent claim to have provided evidence that culture has a causal effect on economic development is unjustified. Tabellini's claim is based on an instrumental variables analysis in which two instruments are used to identify the supposed causal effect. One of these - past literacy - is an invalid instrument. The other - past political institutions - is a weak instrument. The estimates obtained using this second instrument are so imprecise that they cannot be used to support any conclusions about the effect of culture on economic development

Ownership Concentration and Share Valuation: Evidence from Germany.

Concentrated ownership of large listed companies is widespread throughout the world, and Germany is typical in this respect. This paper proposes a method of distinguishing empirically between the beneficial and harmful effects of ownership concentration, and applies it to German data. The results show that, for most types of largest shareholder, the beneficial effects on minority shareholders of increased ownership (greater monitoring of management, and reduced incentives to exploit minority shareholders due to greater cash-flow rights) outweigh the harmful effect (greater private benefits of control due to greater control rights).

The Measurement of Firm Ownership and its Effect on Managerial Pay

This paper uses German evidence to address two questions about corporate governance. The effects of ownership on corporate governance have received much recent attention, but very little of this has been devoted to the appropriate way to measure firm ownership. The results of this paper show that the conclusions reached about the effects of ownership on corporate governance can depend critically on the particular ownership measure used, and that the widely-used weakest-link principle is wholly unsatisfactory as a means of dealing with the issues raised by pyramid ownership structures. The paper also shows that greater ownership concentration typically weakens the link between managerial pay and firm profitability. This is inconsistent with the hypothesis, emphasised in the recent literature on the USA, that large owners are a complement to, rather than a substitute for, such a link.